area handbook series 

Peru 

a country study 



Peru 

country study 

Federal Research Division 
Library of Congress 
Edited by 
Rex A. Hudson 
Research Completed 
September 1992 



On the cover: Thumb-size figurine with movable nose piece 
and war club, headdress, and minuscule owl's-head necklace 
adorns gold and turquoise ear ornament found in a Moche 
tomb's sealed chamber. 



Fourth Edition, 1993, First Printing, 1993. 

Library of Congress Cataloging-in-Publication Data 

Peru: a country study / Federal Research Division, Library of Con- 
gress ; edited by Rex A. Hudson. — 4th ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA Pam ; 550-42) 

"Supersedes the 1981 edition of Peru: a country study, edited 
by Richard F. Nyrop" — T.p. verso. 
"Research completed October 1992." 

Includes bibliographical references (pp. 339-377) and index. 
ISBN 0-8444-0774-7 

Copy 3 Z663.275 .P4 1993 

1. Peru. I. Hudson, Rex A., 1947- . II. Library of Con- 
gress. Federal Research Division. III. Area handbook for Peru. 
IV. Series. V. Series: DA Pam ; 550-42. 
F3408.P4646 1993 93-19676 
985— dc20 CIP 



Headquarters, Department of the Army 
DA Pam 550-42 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared by 
the Federal Research Division of the Library of Congress under 
the Country Studies/ Area Handbook Program sponsored by the 
Department of the Army. The last page of this book lists the other 
published studies. 

Most books in the series deal with a particular foreign country, 
describing and analyzing its political, economic, social, and national 
security systems and institutions, and examining the interrelation- 
ships of those systems and the ways they are shaped by cultural 
factors. Each study is written by a multidisciplinary team of social 
scientists. The authors seek to provide a basic understanding of 
the observed society, striving for a dynamic rather than a static 
portrayal. Particular attention is devoted to the people who make 
up the society, their origins, dominant beliefs and values, their com- 
mon interests and the issues on which they are divided, the nature 
and extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should not 
be construed as an expression of an official United States govern- 
ment position, policy, or decision. The authors have sought to 
adhere to accepted standards of scholarly objectivity. Corrections, 
additions, and suggestions for changes from readers will be wel- 
comed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, D.C. 20540 



111 



Acknowledgments 



The authors would like to acknowledge any contributions made 
by the writers of the 1981 edition of Peru: A Country Study. The 
authors and book editor of the present volume would also like to 
thank one of those writers in particular, James D. Rudolph, for 
kindly supplying the official 1989 Peru regionalization map, on 
which the corresponding map in this volume is based. 

The authors are grateful to individuals in various agencies of 
the United States government, private institutions, and Peruvian 
diplomatic offices who gave their time, research materials, and spe- 
cial knowledge to provide information and perspective. Thanks also 
go to Ralph K. Benesch, who oversees the Country Studies — Area 
Handbook Program for the Department of the Army. None of these 
individuals, however, is in any way responsible for the work of the 
authors. 

The book editor would like to thank members of the Federal 
Research Division who contributed directly to the preparation of 
the manuscript. These include Sandra W. Meditz, who reviewed 
all textual and graphic materials, served as liaison with the spon- 
soring agency, and provided numerous substantive and technical 
contributions; Marilyn L. Majeska, who reviewed editing and 
managed production; Andrea T. Merrill, who edited the tables; 
and Barbara Edgerton and Izella Watson, who did the word process- 
ing. Thanks also go to Cissie Coy, who edited the chapters; Beverly 
J. Wolpert, who performed the final prepublication editorial review; 
and Joan C. Cook, who compiled the index. Malinda B. Neale 
and Linda Peterson of the Library of Congress Printing and 
Processing Section performed the phototypesetting, under the su- 
pervision of Peggy Pixley. 

David P. Cabitto provided invaluable graphics support, includ- 
ing preparation of several maps. He was assisted by Wayne Home, 
who prepared the cover artwork; Harriett R. Blood, who prepared 
the topography and drainage map; and the firm of Greenhorne 
and O'Mara. Deborah Anne Clement designed the illustrations 
on the title page of each chapter. 

Finally, the authors acknowledge the generosity of the individuals 
and the public and private agencies who allowed their photographs 
to be used in this study. 



v 



Contents 



Page 

Foreword ill 

Acknowledgments v 

Preface xiii 

Country Profile XV 

Introduction xxix 

Chapter 1. Historical Setting 1 

Peter F. Klaren 

ANDEAN SOCIETIES BEFORE THE CONQUEST 5 

Pre-Inca Cultures 5 

The Incas 8 

THE SPANISH CONQUEST, 1532-72 12 

Pizarro and the Conquistadors 12 

Consolidation of Control 14 

THE COLONIAL PERIOD, 1550-1824 16 

Demographic Collapse 16 

The Colonial Economy 17 

Colonial Administration 20 

The Colonial Church 21 

Indigenous Rebellions 25 

INDEPENDENCE IMPOSED FROM WITHOUT, 

1808-24 27 

POSTINDEPENDENCE DECLINE AND INSTABILITY, 

1824-45 29 

THE GUANO ERA, 1845-70 31 

Consolidation of the State 31 

Failed Development 32 

THE WAR OF THE PACIFIC, 1879-83 34 

RECOVERY AND GROWTH, 1883-1930 35 

The New Militarism, 1886-95 35 

The Aristocratic Republic, 1895-1914 37 

Impact of World War I 38 

The Eleven- Year Rule, 1919-30 39 

MASS POLITICS AND SOCIAL CHANGE, 1930-68 41 

Impact of the Depression and World War II 41 



vii 



Rural Stagnation and Social Mobilization, 

1948-68 45 

FAILED REFORM AND ECONOMIC DECLINE, 

1968-85 49 

Military Reform from Above, 1968-80 49 

Return to Democratic Rule, 1980-85 52 

Peru at the Crossroads 56 

Chapter 2. The Society and Its Environment .... 59 

Paul L. Doughty 

ENVIRONMENT AND POPULATION 63 

Natural Systems and Human Life 63 

People, Property, and Farming Systems 74 

HUMAN SETTLEMENT AND POPULATION 

THROUGH TIME 79 

Settlement Patterns 81 

Urban, Rural, and Regional Populations 82 

Demography of Growth, Migration, and Work 84 

Regionalism and Political Divisions 91 

CULTURE, CLASS, AND HIERARCHY IN SOCIETY ... 95 

Indigenous Peoples 100 

Legacy of Peonage 102 

Elites 104 

Military Classes 106 

Urban Classes 108 

ASPECTS OF FAMILY LIFE 110 

Urban Informal Sector 112 

Domestic Servants 113 

Godparenthood 113 

Rural Family and Household 114 

COMMUNITY LIFE AND INSTITUTIONS 116 

Catholicism and Community 117 

Community Leadership 121 

Landlords and Peasant Revolts in the Highlands .... 123 

Shining Path and Its Impact 125 

EDUCATION, LANGUAGE, AND LITERACY 127 

The Education System 127 

Universities 131 

HEALTH AND WELL-BEING 133 

Chapter 3. The Economy 137 

John Sheahan 

GROWTH AND STRUCTURAL CHANGE 141 

Historical Background 141 



viii 



Structures of Production 145 

Foreign Trade and the Balance of Payments 165 

Employment and Wages, Poverty, and Income 

Distribution 174 

ECONOMIC POLICIES AND THEIR CONSEQUENCES . . 183 

The Velasco Government 183 

The Search for New Directions, 1975-90 190 

OUTSTANDING ISSUES 199 

Chapter 4. Government and Politics 205 

Carol Graham 

GOVERNMENTAL SYSTEM 208 

Constitutional Development 209 

The Executive 212 

The Legislature 214 

The Judiciary 217 

Public Administration 219 

Local and Regional Government 220 

The Electoral System 222 

POLITICAL DYNAMICS 222 

Political Parties 222 

Nonparty Organizations 228 

INTEREST GROUPS 230 

The Military 230 

The Church 232 

Economic Associations 234 

Labor Unions 236 

Students 239 

News Media 240 

POLITICAL TRENDS 241 

Roots of the 1990-91 Crisis 241 

The Transition to Democracy 241 

The Garcia Government, 1985-90 243 

The 1990 Campaign and Elections 245 

Impact of the "Fujishock" Program 248 

Prospects for the Fujimori Government 249 

FOREIGN RELATIONS 252 

Foreign Relations under Garcia 253 

Foreign Relations under Fujimori 255 

Chapter 5. National Security 259 

David Scott Palmer 

THE ARMED FORCES IN SOCIETY AND POLITICS ... 264 

Changing Role over Time: Preconquest 264 



ix 



Colonial Period 266 

Postindependence: Military Defeat and Nation- 
Building 267 

Guardian of the New Liberal Elite 268 

Reformer and Agent of Change 270 

Protector of Democracy 272 

Changing Constitutional Basis 273 

Changing Foreign Military Missions 

and Impacts 275 

THE ARMED FORCES 278 

Mission and Organization 278 

Training 279 

Army 282 

Navy 284 

Air Force 287 

Uniforms, Ranks, and Insignia 288 

The Military in the 1990s 289 

POLICE FORCES 294 

General Police 295 

Security Police 300 

Technical Police 301 

CHANGING THREATS TO NATIONAL 

SECURITY 302 

External Threats 302 

Internal Threats 303 

CRIME AND PUNISHMENT 311 

Rising Crime Rates 311 

Penal Code 313 

Penal System 315 

Appendix. Tables 319 

Bibliography 339 

Glossary 379 

Contributors 389 

Index 391 

List of Figures 

1 Administrative Divisions (Departments) 

of Peru, 1992 xxviii 

2 Three South American Viceroyalties, ca. 1800 26 

3 Territorial Adjustments among Bolivia, Chile, 

and Peru, 1874-1929 36 



x 



4 Peru's Northern Boundary Disputes in the Twentieth 

Century 42 

5 Topography and Drainage 66 

6 Estimated Population by Age and Sex, 1990 86 

7 Principal Ethnolinguistic Divisions, 1991 98 

8 Gross Domestic Product (GDP) by Sector, 1990 146 

9 Primary Petroleum, Natural Gas, and Minerals 

Activity, 1990 154 

10 Transportation System, 1991 162 

11 Employment by Sector, 1990 178 

12 Government Structure, 1991 210 

13 Proposed Administrative Divisions (Regions) of Peru, 

1992 224 

14 Organization of the National Defense System, 1991 280 

15 Officer Ranks and Insignia, 1991 290 

16 Enlisted Ranks and Insignia, 1991 291 

17 Organization of the National Police, 1991 296 



xi 



Preface 



Like its predecessor, this study is an attempt to examine objec- 
tively and concisely the dominant historical, social, economic, po- 
litical, and military aspects of contemporary Peru. Sources of 
information included scholarly books, journals, monographs, official 
reports of governments and international organizations, and numer- 
ous periodicals. Chapter bibliographies appear at the end of the 
book; brief comments on sources recommended for further read- 
ing appear at the end of each chapter. To the extent possible, place- 
names follow the system adopted by the United States Board on 
Geographic Names. Measurements are given in the metric system; 
a conversion table is provided to assist readers unfamiliar with met- 
ric measurements (see table 1, Appendix). A glossary is also in- 
cluded. 

Spanish surnames generally are composed of both the father's 
and mother's family names, in that order, although there are 
numerous variations. In the instance of Alan Garcia Perez, for ex- 
ample, Garcia is his patronymic and Perez is his mother's maiden 
name. In informal use, the matronymic is often dropped, a prac- 
tice that usually has been followed in this book, except in cases where 
the individual could easily be confused with a relative or someone 
with the same patronymic. 

The body of the text reflects information available as of November 
1992. Certain other portions of the text, however, have been up- 
dated. The Introduction discusses significant events that have oc- 
curred since the completion of research, the Country Profile includes 
updated information as available, and the Bibliography lists re- 
cently published sources thought to be particularly helpful to the 
reader. 



Xlll 



Country Profile 





jNTARCI 



Country 

Official Name: Republic of Peru (Republica del Peru). 

Short Name: Peru. 

Term for Citizens: Peruvian(s). 

Capital: Lima. 

Date of Independence: Declared July 28, 1821, from Spain; 
achieved, 1824. 

NOTE — The Country Profile contains updated information as available. 



XV 



Geography 



Size: 1,285,216 square kilometers. 

Topography: Western coast (Costa) mountainous and arid. Andes 
mountains in center (Andean highlands or Sierra) high and rugged. 
Less than one-fourth of Sierra, which includes cold, high-altitude 
grasslands (the puna), natural pasture. Puna widens into exten- 
sive plateau, Altiplano, adjoining Bolivia in southern Sierra. Eastern 
lowlands consist of semi-tropical and rugged cloud forests of eastern 
slopes (Montana), lying between 800 and 3,800 meters; and jun- 
gle (Selva), which includes high jungle (selva alta), lying between 
400 and 800 meters, and tropical low jungle (selva baja) of Amazon 
Basin, lying between 80 and 400 meters. Land use: 3 percent ara- 
ble, 21 percent meadows and pastures, 55 percent forest and wood- 
land, and 21 percent other, including 1 percent irrigated. 

Climate: Varies from dry in western coastal desert to temperate 
in highland valleys; harsh, chilly conditions on puna and western 
Andean slopes; semi-tropical in Montana; tropical in Selva. Un- 
inhabited areas over 5,500 meters high have arctic climate. Rainy 
season ("winter") runs from October through April; dry season 
("summer") in remaining months. 

Society 

Population: 22,767,543 in July 1992 with 2.0 percent growth rate; 
density, 17.8 persons per square kilometer. Projected population 
growth to 28 million by 2000 with annual growth rate of at least 
2.1 percent. Population 70 percent urban in 1991. 

Education and Literacy: Three-level, eleven- year educational sys- 
tem based on reforms made after the 1968 revolution. First 
preprimary level for children up to six years of age. Free, six-year 
primary education at second level (compulsory) for children be- 
tween six and fifteen years of age. Five-year secondary education 
begins at age twelve. In 1990 gross primary school enrollment ratio 
was 126 percent, but only 58.6 percent of school-age children atten- 
ded school. Over 27,600 primary schools in 1988; over 5,400 second- 
ary schools in 1990. In 1990 Peru had twenty-seven national and 
nineteen private universities, all government-regulated and recip- 
ients of public funding. Estimated 85 percent literacy rate in 1990 
(male 92 percent, female 79 percent) age fifteen and over. 

Health: Peru's health indicators poor, with annual public health 
expenditure per capita of US$18 in 1985-90. In 1992 birth rate 



xvi 



27 births per 1,000 population; infant mortality rate 69 per 1,000 
live births; life expectancy 63 years male, 67 years female. Over 
25 percent of urban residences and about 80 percent of rural resi- 
dences lacked potable water and sewerage, resulting in high death 
rates from infectious diseases. The cholera epidemic that began in 
1990 ranked behind other more common diseases as cause of death 
(3,482 cholera deaths as of January 1993). In 1990-92 some 12 
million Peruvians suffered extreme poverty. Malnutrition and star- 
vation leading causes of illnesses. In 1991 about 1,200 children died 
weekly from malnutrition, while 38 percent of the survivors suffered 
chronic malnutrition. Total of 21,800 physicians in 1989 (1 per 
1,000 persons). In early 1992, abortion considered one of the prime 
health threats for Peruvian women. According to the Ministry of 
Public Health, 43 percent of all maternal hospitalizations in Peru 
resulted from botched abortions. Abortion illegal in Peru except 
in cases where the mother's life is in danger. Reported total of 188 
deaths from acquired immune deficiency syndrome (AIDS) and 
493 cumulative AIDS cases as of September 30, 1991 . Unlike else- 
where in the Andean area, there was a major change from 1989 
to 1990 in the male/female AIDS ratio. While the number of cases 
reported in men remained stable over the 1989-90 period, the an- 
nual incidence among women more than tripled (from 13 to 50 
from 1989 to 1990). 

Religion: Predominantly (92.5 percent) Roman Catholic. Prot- 
estantism and Mormonism growing rapidly among urban poor and 
some indigenous tribes, although accounting for only about 4.5 
percent of Peruvians in 1990. Other denominations in 1990 included 
the Anglican Communion; the Methodist Church, with about 4,200 
adherents; and the Bahai Faith. 

Official languages: Spanish and Quechua. 

Ethnic Groups: Unofficial estimates: Native American, 45 per- 
cent; mestizo (mixed native American and European ancestry), 
37 percent; white, 15 percent; black, Asian, and other, 3 percent. 
Other estimates put native Americans as high as 52.5 percent 
(Quechua, 47.1 percent; Aymara, 5.4 percent). 

Economy 

Gross Domestic Product (GDP): US$20.6 billion in 1991, or 
US$920 per capita. Real GDP per capita in 1990 US$2,622. GDP 
in 1991 in new soles (see Exchange Rate, this section) lower than 
recorded in 1980. Economic growth has declined markedly since 



xvn 



1950-65 period; estimated at 2.4 percent in 1991, minus 2.7 per- 
cent in 1992. Forecast for 1993: 2.5 percent real GDP growth. In 
1990-91 symptoms of 1980s crisis continued, with sharply declin- 
ing per capita output, worsening poverty, accelerating political vio- 
lence, high levels of unemployment (15 percent) and 
underemployment (65 percent) and mounting external debt 
(US$19.4 billion in 1991). In 1990 women made up 33 percent 
of labor force. Foreign debt rose to US$21.6 billion in 1992. Labor 
force increased to 7.6 million by 1990. After Alberto K. Fujimori 
took office as president (1990-), inflation declined significantly to 
only 139 percent per year by the end of 1991, as compared with 
7,650 percent in 1990, and 56.6 percent in 1992. Inflation fore- 
cast for 1993: 47 percent. 

Agriculture: Production lagging behind population growth. Out- 
put per capita and share of output going to exports declined dur- 
ing 1980s. Accounted for only 10 percent of GDP in 1991. 
Agriculture employed 38 percent of labor force in 1991 . New agrar- 
ian law passed in April 1991 amended 1969 Agrarian Reform Law 
by allowing private ownership of agricultural land by companies 
and individuals. Fish catch in 1989 totaled 10 million tons, but 
output fell 13 percent in 1991. Worsened by El Nino warm cur- 
rent, output fell 31 percent in first two months of 1992, but in- 
creased by 52 percent in the first quarter of 1993. Food imports 
estimated to cost Peru almost US$700 million in 1992, 64 percent 
more than in 1991. 

Industry: After only 1.6 percent annual growth during 1980s, 
production, particularly basic medals, plummeted 23 percent in 
1989. Mining, including petroleum, accounted for only 9 percent 
of GDP in 1988 but for nearly half of Peru's export earnings, with 
copper accounting for over one-fifth. Copper, silver, and iron out- 
look remained poor in 1991, when 13,500 miners lost their jobs 
as production slumped because of low world prices, low produc- 
tivity, under-investment, strikes, and terrorism. Manufacturing 
accounted for 24 percent of GDP in 1991. Industry-commerce share 
of total employment 17 percent in 1991. Informal sector account- 
ed for considerable production and personal services. Coca/cocaine 
industry added estimated 4 percent to value of GDP in 1989. 

Energy: After increasing in the 1970s, oil production fell sharply 
in 1980-88 because of mismanagement, political violence, and price 
controls. Oil and gas industry remained moribund in early 1990s. 
Oil output totaled 41.8 million barrels in 1991, 11 percent lower 
than in 1990. Fujimori government sought new investment by 



xvm 



foreign oil companies and ended monopoly by state oil firm. Reso- 
lution of disputes with two United States oil firms in 1991-92 im- 
proved Peru's relations with international community. In 1991 total 
electricity capacity 4,896,000 kilowatts; 15,851 million kilowatt 
hours produced, with 709 kilowatt hours per capita. 

Services: Government made up about 8 percent of GDP in 1991 . 
Construction, accounting for 6 percent of GDP in 1991, soared 
18 percent in first two months of 1992. In April 1991, government 
liberalized banking system by suspending Central Bank's powers 
to set interest rates and allowing foreign banks to operate in Peru 
under same conditions as Peruvian banks. Services sector accounted 
for 45 percent of employment in 1991. Country's massive infor- 
mal sector included more than half of total urban labor force. 

Exchange Rate: The new sol, equivalent to 1 million intis, offi- 
cially established as Peru's new currency on January 4, 1991. 
Replacement of inti became effective on July 1, 1991, at S/0.79 
to US$1 . In 1990 inti's exchange rate had reached 187,886 to US$1 . 
New sol consists of 100 centimos. After remaining heavily over- 
valued and unchanged against the dollar for six months, sol 
depreciated following the April 1992 coup from S/0.94 to US$1 
to S/1.03 to US$1. As of December 31, 1992, the official rate was 
US$1 = 1.605 new soles. 

Imports: Totaled US$3.5 billion in 1991 , US$4.0 billion in 1992. 
In 1990 imported products included intermediate goods (45 per- 
cent), capital goods (32 percent), and consumer goods (11 percent). 
Terms of trade (see Glossary) index in 1990 was a low 78. In 1991 
imports came from the United States (32 percent), Latin America 
(22 percent), European Community (17 percent), Switzerland (6 
percent), Japan (3 percent). Under policy changes implemented 
by Fujimori government in September 1990 and March 1991, all 
direct quantitative restrictions on imports eliminated; rate of pro- 
tection for industry cut from 83 percent to 24 percent; and tariff 
rates consolidated at three much lower levels: 15 percent for in- 
puts into production, 20 percent for capital goods, and 25 percent 
for consumer goods. 

Exports: Totaled US$3.3 billion in 1991, US$3.4 billion in 1992. 
Metals and petroleum most important products. In 1990 leading 
metal, copper, accounted for 22 percent of exports; zinc, 12 per- 
cent; lead, 6 percent; oil and oil products, only 8 percent; and non- 
traditional products, 30 percent. Fish meal exports in 1989 
accounted for 12 percent of exports. Estimated illegal exports of 



xix 



coca/cocaine US$5.6 billion in 1989. Tariff structure and sol's over- 
valuation relative to dollar exacerbated long-running crisis for le- 
gal exporters. In 1991 legal exports destined to United States (22 
percent), Latin America (12 percent), Japan (13 percent), Euro- 
pean Community (28 percent), former Soviet Union (2 percent). 

Balance of Payments: Total long-term debt of public and private 
sectors estimated US$13.9 billion at end of 1988, with 50 percent 
of long-term debt accounted for by public sector. After limiting 
debt-service payments to 10 percent of export earnings in 1985, 
Peru at odds with international creditors until 1991 , when Fujimori 
government sought to smooth relations. On September 13, 1991, 
International Monetary Fund (IMF — see Glossary) approved Peru's 
economic stabilization program, securing Peru US$1 . 16 billion to 
clear its arrears from support group of countries to support balance 
of payments in 1991-92 and allowing rescheduling of US$6.6 bil- 
lion of the US$7 billion external debt. International reserves ex- 
ceeded US$1 .4 billion by early 1992. Large amounts in loan funding 
from multilateral institutions delayed as a result of April 1992 coup. 
Trade deficit widened after import restrictions removed in a con- 
text of overvalued currency. In March 1993, Peru cleared its 
US$1.7 billion in arrears to the IMF and World Bank (see Glos- 
sary), clearing the way to an expected agreement with the Paris 
Club of official creditors. 

Fiscal Year: Calendar year. 

Fiscal Policy: Fujimori program implemented in August 1990 in- 
cluded limiting public-sector wages in terms of Peruvian curren- 
cy; removal of subsidies; sharp increases in gas, utility, and food 
prices; strict government spending policies; and more efficient tax 
collection. Reversing his electoral position, Fuijmori adopted 
privatization program. Government's austerity measures won ap- 
proval of international financial community, but financial stabili- 
ty threatened. Economy remained bogged in recession in first half 
of 1992. Government cut interest rates across the board in mid- 
March 1992, and borrowers in local currency paid about 8 percent 
per month. Bulk of privatization program began being implemented 
in early 1992, with 150 companies being considered for sale, in- 
cluding the state airline, or dismantlement (a total of 12 enterprises 
were privatized in 1992). In early 1992, government's 20 percent 
tax on interest from dollar savings deposits, designed to push down 
the value of sol, instead pushed up exchange rate and further 
squeezed liquidity. 



xx 



Transportation and Communications 



Ports: Lima's port of Callao services most shipping. Of country's 
seventeen deep-water ports, most in northern Peru. Five main river 
ports. 

Railroads: System totaled 1,884 kilometers in 1990 (1,584 kilo- 
meters of standard gauge and 300 kilometers of narrow-gauge track). 

Roads: System totaled 69,942 kilometers in 1991, including 7,459 
kilometers of paved roads, 13,538 kilometers of gravel, and 48,945 
kilometers of unimproved earth. Road maintenance haphazard and 
substandard, except for Pan American Highway and Trans- Andean 
Highway. 

Airports: In 1991 Peru had 201 usable airports, 36 with permanent- 
surface runways. Jorge Chavez International Airport near Lima 
principal international airport. 

Waterways: Totaled 8,600 kilometers of navigable tributaries of 
the Rio Amazonas (Amazon River) and 208 kilometers of Lake 
Titicaca. 

Telecommunications: Telephone system one of Latin America's 
least developed (544,000 telephones). Peru eliminated its telecom- 
munications monopoly in November 1991 after concluding state 
companies had impeded modernization and hurt consumers, es- 
pecially in rural areas. Broadcast stations included 273 AM, no 
FM, 140 TV, 144 shortwave. 

Government and Politics 

Government: On April 5, 1992, democratically elected President 
Fujimori staged military-backed self-coup, closing legislative and 
judicial branches and suspending 1979 constitution. Under 1979 
constitution, executive power vested in president of the republic, 
elected for a five-year term. If no one presidential candidate received 
an absolute majority, the first- and second-place candidates ran 
in a runoff election. President could not serve two consecutive terms. 
Governed with a Council of Ministers that included a prime 
minister. Bicameral Congress had a 60-member Senate, elected 
on a district basis; and a 180-member Chamber of Deputies directly 
elected by proportional representation. Both houses elected for terms 
of five years coinciding with those of president and vice president. 
Only 6 percent of congressional seats occupied by women in 1991 . 
Needed two- thirds vote to override presidential veto. Supreme Court 
of Justice highest judicial authority; twelve members nominated 



xxi 



by president for life terms. At regional level, 1979 constitution man- 
dated establishment of regional governments. Regionalization in- 
itiated in 1988 but stalled in 1992. Direct elections for municipalities 
held every three years and for regions, every five years. Under in- 
ternational pressure, Fujimori began transition to his reformed ver- 
sion of democracy with the establishment of the Democratic 
Constituent Congress (Congreso Constituyente Democratico — CCD) 
to serve as autonomous, single-chamber legislative body. Its eighty 
members were elected on November 22, 1992, in free and fair elec- 
tions. Nationwide municipal elections held on January 29, 1993. 

Politics: Peru's multiparty system traditionally has had numer- 
ous political parties. Virtually unknown, Fujimori ran for presi- 
dent in 1990 as outsider candidate of Peru's newest party, Cambio 
'90 (Change '90). With help from business and informal sectors 
and Evangelical grassroots organizers, Fujimori elected overwhelm- 
ingly by electorate that had lost faith in established political sys- 
tem. Succeeded populist Alan Garcia Perez, controversial head of 
left-of-center American Popular Revolutionary Party (Alianza 
Popular Revolucionaria Americana — APRA), Peru's oldest party. 
Impatient with legislative and judicial hindrance of free-market re- 
forms, Fujimori staged self-coup on April 5, 1992, with full backing 
of armed forces, dissolving Congress, suspending 1979 constitu- 
tion, and moving against political opposition led by Garcia, who, 
accused of stockpiling weapons, fled into exile. 

International Relations: In 1970s Peru's leftist military regime 
adopted independent, nonaligned course, expanding ties with com- 
munist world, particularly Soviet Union, becoming its largest mili- 
tary client in Latin America. Civilian government in 1980-85 
deemphasized Peru's nonaligned stance and sought closer relation- 
ships with United States and Latin America. Under Garcia, Peru 
reverted to anti-imperialist, openly confrontational strategy, strain- 
ing relations with international financial community. Isolated stance 
on nonpayment of foreign debt, country's economic and insurgency 
crises, and cholera epidemic strained relations with neighbors. 
Fujimori sought to repair Peru's standing in international finan- 
cial community and relations improved. Despite signing of drug 
accord in May 1 99 1 , relations with United States remained strained 
over Fujimori's reluctance to increase United States and Peruvian 
military efforts in eradicating coca fields and improving govern- 
ment's human rights record. 

United States economic assistance to Peru has aimed at com- 
batting narcotics. United States provided US$173 million in aid 
in fiscal year (FY) 1991 and US$129 million in FY 1992. About 



xxn 



US$85 million in additional Economic Support Fund (ESF) as- 
sistance appropriated in FY 1991 and FY 1992 was suspended in 
September 1991 because of human rights conditions imposed on 
the FY 1991 aid and because of the April 5, 1992, self-coup. Unit- 
ed States FY 1993 foreign aid appropriation legislation prohibited 
FY 1993 military aid for Peru and reduced ESF assistance to US$40 
million. Available FY 1993 United States support totaled US$245 
million, including US$130 million in accumulated ESF assistance 
funds, US$25 million in development assistance, US$72 million 
in food aid, US$17.5 million in counternarcotics assistance, and 
US$0.7 million in International Military Education and Training 
(IMET) assistance. International community was also unwilling 
to provide credit or aid until restoration of democratic government. 
This attitude changed in March 1993 when Peru cleared its ar- 
rears with IMF. United States administration of President Bill Clin- 
ton subsequently released, in stages, suspended ESF assistance, 
specifically US$85 million in balance-of-payments support. 

International Agreements and Membership: Member, Amazon 
Group; Andean Group; Customs Cooperation Council; Econom- 
ic Commission for Latin America and the Caribbean; Food and 
Agriculture Organization; Group of Eleven; Group of Nineteen; 
Group of Twenty-Four; Group of Seventy-Seven; General Agree- 
ment on Tariffs and Trade; Inter- American Development Bank; 
International Atomic Energy Agency; International Bank for 
Reconstruction and Development; International Civil Aviation Or- 
ganization; International Confederation of Free Trade Unions; In- 
ternational Development Association; International Fund for 
Agricultural Development; International Finance Corporation; In- 
ternational Labor Organization; IMF; International Maritime 
Satellite Organization; International Telecommunications Satel- 
lite Organization; International Criminal Police Organization; In- 
ternational Olympic Committee; International Organization for 
Migration; International Organization for Standardization; Inter- 
national Telecommunications Union; Latin American Economic 
System; Latin American Integration Association; League of Red 
Cross and Red Crescent Societies; Nonaligned Movement; Organi- 
zation of American States; Agency for the Prohibition of Nuclear 
Weapons in Latin America and the Caribbean; Permanent Court 
of Arbitration; Rio Group; United Nations; United Nations Con- 
ference on Trade and Development; United Nations Education- 
al, Scientific, and Cultural Organization; United Nations Industrial 
Development Organization; United Nations Iran-Iraq Military 
Observer Group; Universal Postal Union; World Confederation 



xxin 



of Labor; World Federation of Trade Unions; World Health Or- 
ganization; World Intellectual Property Organization; World 
Meteorological Organization; and World Tourism Organization. 

National Security 

Armed Forces: In 1992 included army (75,000), navy (22,000), 
and air force (15,000), with total strength of 112,000. Conscripts 
(69,000) made up 62 percent of armed forces (army, 69 percent; 
navy, 45 percent; air force, 47 percent). Creation of Ministry of 
Defense in 1986 unified armed forces under one ministry, eliminat- 
ing separate service ministries. Military expenditure as a percent- 
age of GDP in 1990 was 2.1 percent. Defense expenditures in 1991 
totaled US$750 million. Defense budget in 1992 totaled US$656.8 
million. A total of 18.5 percent of 1992 national budget earmarked 
for national security. Services traditionally provided excellent officer 
education and training, but Peru's deep financial crisis of the 1980s 
and 1990s affected program adversely. 

Military Units: Army organized into twelve divisions (each con- 
sisting of four infantry battalions and artillery group), including 
one jungle operations, one cavalry, one special forces, one airborne, 
six motorized infantry, and two armored divisions. Army infan- 
try, armored, and engineers forces organized into thirty-six bat- 
talions and nineteen groups. Army deployed into five military 
regions. Navy organized into Pacific Naval Force and Amazon 
River Force. Air force organized into some nine groups and twenty- 
two squadrons across country's three air defense zones. 

Equipment: Soviet equipment predominated in army in 1990-92. 
Ground forces had significant armored capability, with 320 Soviet 
T-54, T-55, and T-62 tanks, as well as 1 10 French AMX-13 light 
tanks. Latin America's third-largest navy by late 1980s; navy's Pa- 
cific force had two cruisers, six destroyers, four missile frigates, 
nine submarines (plus one training submarine), and six missile at- 
tack craft. Latin America's third-largest air force by late 1980s; 
air force had advanced (mostly Soviet) equipment. Inventory in- 
cluded Sukhoi Su-22 and Canberra bombers, Mirage fighters, and 
Mi-24 attack helicopters. 

Police: National Police, with 84,000 personnel in 1992, consisted of 
military-like General Police (at least 42,500); Technical Police, a 
plainclothes investigative and forensic group (at least 13,000); and Se- 
curity Police, border guard and penitentiary force (at least 21,500) — all 
under Ministry of Interior. General Police organized into fifty-nine 
commands across five police regions — same regions as army's. 



xxiv 



Antinarcotics Forces: National Police had primary responsibility 
for antinarcotics efforts, but army has been called on to drive in- 
surgents out of coca-growing Upper Huallaga Valley. Police em- 
phasized interdiction of cocaine and cocaine paste rather than 
eradication of coca plants. At end of July 1991, Peru signed two 
antidrug accords with United States linking drug fight with coun- 
terinsurgency. National Police in early 1990s had serious problems 
with corruption, repression, and hostile relations with army. 

Paramilitary Forces: In response to insurgency challenge, cen- 
tral government encouraged creation of local community self- 
defense forces in rural areas, beginning in mid-1980s. Known as 
Peasant Patrols {rondos campesinas), these forces began receiving light 
arms from the army in 1991. Right-wing paramilitary squads in- 
cluded the Rodrigo Franco Command, formed in 1988 and linked 
to the Aprista minister of interior and APRA during the Garcia 
government. 

Insurgents: Two significant guerrilla organizations contested 
government authority in various parts of country. Shining Path 
(Sendero Luminoso), radical Maoist group that began operations 
in 1980, had an estimated 3,000 to 4,000 armed cadre in mid- 1992. 
The Tupac Amaru Revolutionary Movement (Movimiento Revolu- 
cionario Tupac Amaru), which began activity in 1985, had between 
750 and 1,000 under arms in 1992. Both groups suffered serious 
reverses in last quarter of 1992. 



xxv 




Ocean 



International boundary 

Department boundary 

(§) National capital 
O Department capital 
® Province capital 

NOTE: 

Callao is the capital of the Constitutional Provi 
of Callao, which has the status of a departm* 
but is too small to be shown on this map. 

100 200 Kilometers 

I 1 1 J 1 

100 200 Miles 



Figure 1. Administrative Division 
xxviii 



Introduction 



ONCE THE CENTER of the powerful and fabulously wealthy 
Inca Empire, Peru in the early 1990s was an impoverished, crisis- 
prone country trying to cope with major societal, economic, and 
political changes. The strong undercurrents propelling these changes 
flowed from what historian Peter F. Klaren describes as Peru's 
historical "dualism": a wide racial, socioeconomic, and political 
division between the small white Criollo elite in Lima and the vast 
majority of the population, consisting of native Americans in the 
Andean interior and mestizos (those of mixed race; see Glossary), 
located mostly in the coastal cities. Until the 1980s, this dualism 
put Lima in sharp contrast to the native American interior. Ac- 
cording to Klaren, however, this traditional dualism has been erod- 
ing both ethnically as a result of the increasing Andeanization of 
Lima and politically as a result of "the dispersion of power away 
from the traditional triumvirate of oligarchy, church, and armed 
forces." 

Anthropologist Jose Matos Mar has noted that by the early 1990s 
the process of integration of Peru's native American population 
from the Andean highlands (Sierra) and jungle (Selva) regions had 
given Peru a new identity, one distinctly different from the tradi- 
tionally dominant coast (Costa) culture of the Lima elites. Begin- 
ning in the mid-1970s, increasingly large numbers of highlanders 
began moving to Lima in search of work. This process was acceler- 
ated in the 1980s as mainly Quechua- speaking highlanders fled the 
growing violence of the Maoist-oriented Communist Party of Peru- 
Shining Path (Partido Comunista del Peru-Sendero Luminoso — 
PCP-SL, hereafter SL) and the army's harsh counterinsurgency 
measures. For anthropologist Paul L. Doughty, the Andeaniza- 
tion of Lima exemplifies a "reconquest" of Peru by the long- 
exploited native highlanders. This reconquest, however, has been 
confined to demographics and sociopolitical identity; the traditional 
socioeconomic chasm has remained and even widened. 

In the early 1990s, the dualism model of analysis remained vaild 
in the case of Peru. Most of the former highlanders who had left 
the Andean countryside looking for a better life in Lima remained 
harshly marginalized (see Glossary). They survived in the capi- 
tal's informal sector (see Glossary), living precariously in squalid 
conditions in makeshift shacks in the sprawling urban barriadas (see 
Glossary), known as pueblos jovenes, or "young towns," on the hills 
that surround Lima. In mid- 1992 at least 7 million people, or about 



xxix 



one-third of the country's 22.7 million inhabitants, lived in Lima, 
which is now largely mestizo and native American, reflecting the 
new national identity of mestizaje (miscegenation). Despite Lima's 
Andeanization, the vast majority of the population still earns only 
a small percentage of the national income. 

Peru's continuing dualism is symbolized by two prominent 
statues: the statue of Francisco Pizarro, the conqueror of the In- 
cas and founder of Lima, in Lima's Government Center and the 
thirty-five-meter-high statue of Pachakuteq (Pachacuti Inca Yupan- 
qui) erected near Cusco (Quechua: "Qpsqo") in 1992. The eco- 
nomic elites in Lima have identified more closely with the heritage 
of their Spanish ancestry, including the tradition of treating the 
proud but humble descendants of the remarkable native Ameri- 
can civilizations of ancient Peru with the same racial stereotypes 
and arrogant contempt. Essentially, the great majority of Peruvi- 
ans remained marginalized in a resource-rich but economically im- 
poverished and racially divided nation. As described by Italian 
naturalist Antonio Raimondi in 1874, Peru was still basically "a 
beggar sitting on a gold bench." 

By 1990 Peru had changed far more significantly than many poli- 
ticians in Lima realized as a result of the historic shift in its demo- 
graphics and Lima's racial composition; the almost total disaffection 
of Peruvians with their political institutions, indeed, with democracy 
itself because of endemic governmental corruption and incompe- 
tence, particularly during the administration of Alan Garcia Pe- 
rez (president, 1985-90); and the gradual disintegration of the state. 
For the first time since the demographic collapse of the native 
American population in the sixteenth and seventeenth centuries 
and the colonial subjugation of the country, Peru's national iden- 
tity was more autochthonous than extraneous. These trends, com- 
bined with the increasing class divisions and antipathy within Peru's 
multiethnic society, created a ground swell in Peruvian politics and 
society that, ironically, propelled a politically unknown, second- 
generation Japanese-Peruvian (a nisei), Alberto Keinya Fujimori, 
to the presidency in July 1990. 

Fujimori's parents arrived in Peru from Japan in the early 1930s, 
just before the Peruvian government ended Japanese immigration 
out of concern that Japanese immigrants were too competitive. His 
father prospered as a shopkeeper until anti-Japanese riots erupted 
in Lima in 1940 and the government closed the family business. 
Although his parents remained Buddhists, they allowed their son 
to grow up as a Roman Catholic and to attend Roman Catholic 
schools. Fujimori graduated first in his class from the National 
Agrarian University (Universidad Nacional Agraria — UNA) in 



xxx 



Lima in 1960. During his career as an agronomist and mathemat- 
ics professor, Fujimori earned an M.A. in mathematics from the 
University of Wisconsin at Madison in the early 1970s and served 
as UNA's rector, as well as president of the national association 
of rectors, from 1984 to 1989. His hosting of a Lima television talk- 
show program on Peru's socioeconomic problems apparently in- 
spired him to make a mid-life career change. Fujimori entered the 
presidential and senatorial races simultaneously in 1990 as the in- 
dependent candidate of the new Change '90 (Cambio '90) party, 
an eclectic alliance of Protestant evangelicals, small-business owners, 
peasants, and shantytown dwellers. Doing better than expected as 
a candidate for president, he soon found himself battling another 
political neophyte — renowned novelist Mario Vargas Llosa. 

After becoming involved politically in August 1987, when he pro- 
tested the announced plan by populist Garcia to nationalize all 
financial institutions and insurance companies, Vargas Llosa found 
himself heading the new Liberty Movement (Movimiento de Liber- 
tad). Alarmed over the antidemocratic and socialist direction his 
country was taking at the end of its first decade of democracy, Var- 
gas Llosa gave up his cherished literary solitude for the tumultu- 
ousness of a presidential campaign, even though he was still 
ambivalent about getting further involved politically. Instead of 
becoming an independent candidate like Fujimori, however, Var- 
gas Llosa, whose Peruvian campaign consultants were all upper 
class, made the strategic blunder of joining the center-right alli- 
ance called the Democratic Front (Frente Democratico — Fredemo). 
Fredemo had been formed in 1987 by two of the traditional oppo- 
sition parties — Popular Action (Accion Popular — AP), headed by 
former president Fernando Belaunde Terry (1965-68, 1980-85); 
and the Popular Christian Party (Partido Popular Cristiano — PPC), 
headed by Luis Bedoya Reyes. Because both the AP and PPC were 
discredited as oligarchical in the eyes of most Peruvians, Vargas 
Llosa compromised his image as an outsider and an advocate of 
change by joining Fredemo. 

The candidacies of Fujimori and Vargas Llosa increasingly 
reflected Peru's widening socioeconomic and cultural divisions. The 
first electoral round, held in April 1990, showed that the electorate 
was polarizing between the large and rapidly growing poor majority, 
consisting of Spanish-speaking mestizos (constituting 37 percent 
of the population) and largely Quechua-speaking native Ameri- 
cans (45 percent) on one hand, and the small minority of Cauca- 
sians (15 percent), the well-off Criollo Peruvians, on the other. The 
white Criollo elite, which traditionally had held power, favored the 
patrician Vargas Llosa, culturally more European than Peruvian. 



xxxi 



Vargas Llosa's popularity with the general public waned, however, 
as he began to be viewed as a protector of the traditional ruling 
class. In the first electoral round in April 1990, Fujimori came in 
second, only four points behind Vargas Llosa, who was still con- 
sidered Garcia' s most likely successor. 

Vargas Llosa's popularity soared when, exasperated by the bick- 
ering between his two party allies, he withdrew from Fredemo and 
went to Italy to accept a literary award. But the euphoria was short- 
lived. Peruvians felt betrayed when he rejoined Fredemo after the 
AP and PPC hastily reached an accord. His base of support in 
Lima, the center of political power, withered further as a result 
of his expensive and slick media blitz, which was culturally insen- 
sitive to Peru's predominantly nonwhite population. In addition, 
his exhausting, United States-style campaign tour of Peru's twenty- 
four departments aroused more curiosity than enthusiasm. Observ- 
ers noted that Vargas Llosa talked above the heads of the voters 
and came across as too aloof, urbane, and privileged for the aver- 
age Peruvian to be able to identify with him. 

The two campaigns were worthy of an ironic political novel by 
Vargas Llosa himself. The agnostic, intellectual novelist found him- 
self strongly supported by the Roman Catholic Church and, at least 
initially, the military. Tainted by his Fredemo alliance, however, 
he was widely seen by ordinary Peruvians as representative of the 
Criollo upper classes of Lima. His fanciful comment during a de- 
bate with Fujimori about how he would like to make Peru "like 
Switzerland" only heightened a public perception that he was out 
of touch with Peruvian reality. At the same time, he may have been 
too realistic for many poor Peruvians alarmed by his economic 
"shock" program. 

By contrast, Fujimori, a devout Roman Catholic, gained the fer- 
vent support of the small evangelical Protestant community and 
the mass of poor Peruvians (his own 1 00, 000-member Japanese 
community was ambivalent, fearful of an ethnic backlash should 
his presidency be a failure). He forged a tacit alliance with the mili- 
tary but called the Roman Catholic Church "medieval and recal- 
citrant" for its opposition to birth control. As an independent 
antipolitician, a Japanese-Peruvian, and a native of Lima's Ba- 
rrios Altos, he was perceived as personifying not only change, but 
also the country's polyglot reality. His Japanese ancestry proved 
to be an asset, not only because Peruvians claimed to admire Japan 
more than any other nation, but also because Fujimori held out 
the prospect of an efficient, Japanese-assisted solution to Peru's 
problems. His advocacy of "work, honesty, and technology," for- 
eign investment to increase productivity, economic development, 



xxxn 



and an end to food subsidies to make farming more profitable had 
popular appeal. The masses began to see Fujimori as someone who 
favored more democracy, greater openness, and less politiqueria (pet- 
ty politics) and authoritarianism than Vargas Llosa offered as head 
of the old-style Fredemo. 

Fujimori stunned Vargas Llosa, as well as Peru and the world, 
by decisively winning the June 1990 runoff election. He received 
56.5 percent of the popular vote and carried twenty-three of Peru's 
twenty-four departments. Vargas Llosa' s Fredemo collected only 
33.9 percent of the vote. 

Fujimori won the 1990 elections in large measure because his 
army of unpaid volunteers ran a grassroots campaign that garnered 
70 percent of the vote in the working-class districts of Lima. Polit- 
ical economist Carol Graham notes that "The 1990 electoral results 
reflected a total dissatisfaction and lack of faith on the part of the 
populace in traditional politicians and parties." Indeed, polls had 
revealed a general view that a decade of democracy had given Peru- 
vians only corruption, ineptness, chaos, poverty, triple-digit in- 
flation, disorder, hunger, and malnutrition. For example, a poll 
in June 1989 found that 96 percent of Peruvians had little or no 
confidence in the judicial process, and 75 percent thought that the 
National Congress was obstructing economic progress. 

With Fujimori's assumption of office on July 28, 1990 (Peru's 
independence anniversary as well as Fujimori's birthday), Peru was 
no longer governed with the backing of a major political party, 
a factor that gave Fujimori unprecedented independence. Adopt- 
ing a pragmatic approach to governing, Fujimori refused to make 
the traditional deals with any political parties. Ignoring the advisers 
who helped to get him elected, he recruited others to help him 
govern. He consulted specialists with international prestige, such 
as Harvard-trained economist Juan Carlos Hurtado Miller, who 
was named minister of economy and finance, and economist Her- 
nando de Soto, author of The Other Path, an acclaimed book on 
Peru's informal economy, as well as relatively unknown figures 
of Asian origin. 

Like a true politician, Fujimori then reversed a major campaign 
pledge by quickly adopting and implementing Vargas Llosa' s draco- 
nian, neoliberal, economic austerity program in an attempt to bring 
the country's hyperinflation under control and reach an understand- 
ing with the international financial community. It was bitter medi- 
cine, but Peruvians accepted it stoically. Meanwhile, Fujimori's 
approval rating plummeted to 31 percent in July 1991, according 
to a poll conducted by Apoyo, a Lima-based private market research 
company. "Fujishock" proved to be effective, however. From 7,650 



xxxm 



percent in 1990, inflation plunged to under 200 percent in 1991. 
But before that happened, Fujimori replaced Hurtado Miller as 
minister of economy and finance with Carlos Bolofia Behr, a young 
economist with a doctorate from Oxford University. The troubled 
Andean nation hence entered the 1990s with Fujimori serving as 
one of its most efficient, if authoritarian, democratically elected 
civilian presidents. Aided by the success of his anti- inflationary 
measures, Fujimori soon improved his standing in the eyes of most 
Peruvians. 

Despite his success in liberalizing the economy in his first year, 
Fujimori was unable to implement other economic priorities for 
lack of a legislative majority. The negative effects of his harsh eco- 
nomic policies were increased unemployment and poverty. Real 
incomes were cut in half in Fujimori's first year. By 1991 , accord- 
ing to the United Nations Economic Commission for Latin America 
and the Caribbean (EC LAC — see Glossary), real wages in Peru 
had plummeted by two-thirds since 1987. In 1990-91 an addition- 
al 5 million Peruvians were pushed into extreme poverty, raising 
the overall figure to at least 13 million (60 percent of the popula- 
tion). Only the informal economy enabled these impoverished mil- 
lions to survive. Nevertheless, each year about 60,000 children were 
reported to die from malnutrition and disease before their first birth- 
day, and 75,000 before age five. 

Peru's quality of life had declined drastically since the mid-1970s. 
In 1992 the Population Crisis Committee of the United States rat- 
ed Lima, which has been growing by an estimated 400,000 new 
people annually, among the world's ten worst cities in quality-of- 
life factors. In the United Nations Development Programme's 1991 
ranking of Peru's Human Development Index (HDI), a measure 
that combines per capita product with factors such as longevity and 
access to education, Peru ranked in seventy-eighth place world- 
wide, but fell to ninety-fifth place in the 1992 ranking of the HDI. 
Peru's socioeconomic statistics were generally grim. Only 13 per- 
cent of national income in the early 1990s went to the poorest 40 
percent of the population. The poor were earning an average of 
US$200 a year in 1992. By 1990 the state spent US$12.50 per per- 
son on health and education, as compared with US$49 in 1981. 
Improving Peru's public education remained an uphill struggle for 
the Fujimori government. In 1990 less than 59 percent of school- 
age children attended school. During that year, almost 27,500 
teachers, whose salary was less than US$60 a month, changed their 
professions. Most schools lacked even water, light, and sanitary 
facilities. In 1991, 16 percent of school children dropped out, ac- 
cording to the Ministry of Education. 



xxxiv 



Although the economy remained a major concern of Peruvians, 
about 68 percent of the citizens polled in a 1990 survey identified 
the SL as the nation's most serious problem. Political violence con- 
tinued unabated during 1991-92. In 1991 Peru recorded 3,400 
deaths from political violence, a 10 percent increase over 1990. Peru 
remained in a state of national insecurity for much of 1992 as a 
result of an economic depression and thirteen years of steadily in- 
creasing terrorism perpetrated by the SL. In 1992 political violence 
claimed 3,101 lives, with the SL and forces of public order respon- 
sible for 44 percent and 42 percent, respectively, of the dead. By 
the end of 1992, a total of 28,809 people had fallen victim to polit- 
ical violence since the SL began its terrorist war in 1980, accord- 
ing to the National Human Rights Coordinating Group. An 
estimated US$22 billion in property damage was a by-product of 
this violence. 

Since beginning its terrorism during Peru's democratic elections 
in May 1980, the SL has been an implacable threat to the coun- 
try's battered democracy. The widely reported urban terror per- 
petrated mainly by the SL, but also by the much smaller, pro-Cuban 
Tupac Amaru Revolutionary Movement (Movimiento Revolu- 
cionario Tupac Amaru — MRTA), combined with economic chaos, 
gave Peru the notoriety of being South America's most unstable 
nation. In September 1991, Fortune magazine rated Peru as the risk- 
iest country in the world for investment, and the British newslet- 
ter Latin American Special Reports ranked it as the Latin American 
country with the highest political risk and the region's highest per- 
centage of poor (60 percent). 

By the early 1990s, more than half the population was living in 
"emergency military zones," where the security forces operated 
without accountability to the central government. Thus, the rural 
residents were caught between two brutal armies of occupation that 
terrorized them on a daily basis for any perceived sympathy to, 
or collaboration with, the other side. The army, the security forces, 
and the SL have all systematically perpetrated barbarous crimes 
against the rural population, with the female gender suffering no 
less than the male. The SL is one of the world's most brutal ter- 
rorist organizations, whose rural terror has been a major causa- 
tive factor in the mass flight of Peruvians from the highlands to 
the cities, especially Lima, Arequipa, Cusco, and Ilo. Most Peru- 
vians under twenty-four years of age were abandoning rural areas 
for Lima and other coastal cities, where they were emigrating in 
large numbers, mostly to the United States. 

Viewing the SL insurgency through theoretical lenses, some po- 
litical scientists, such as Cynthia McClintock and Gordon H. 



xxxv 



McCormick, have depicted the SL as a peasant-based movement, 
a characterization that seemed to exaggerate the SL's limited sup- 
port among the peasantry. Evidence to support the applicability 
of paradigms of peasant rebellion to the case of the SL was lack- 
ing. In the early 1990s, the SL was reliably reported to be a large- 
ly nonpeasant organization. It clearly lacked the degree of peasant 
support needed for mobilizing an indigenous uprising compara- 
ble to those of the eighteenth century, let alone a large enough frac- 
tion of the support needed in the pueblos jovenes and other sectors 
to cause an urban uprising, as occurred in Nicaragua in 1979. SL 
militants consisted primarily of highly indoctrinated, poor, provin- 
cial, mestizo teenagers in shantytown strongholds. SL leaders were 
largely white, middle-class, university-educated ideologists from 
various professions. The fanatical, ultraviolent SL was as alien to 
the vast majority of nonviolent, nonpolitical Peruvian peasants and 
the urban poor as Cambodia's Khmer Rouge. Although it masquer- 
aded as a political party and a peasant movement, the SL, like Pol 
Pot's Khmer Rouge, had succeeded only in depopulating the coun- 
tryside through terror rather than in fomenting a popular peasant 
revolution. 

The basic SL strategy supposedly was to "win" the country- 
side, then to "encircle" and "strangle" Lima. However, the SL's 
actual power, because of the nature of terrorism as the instrument 
of the weak, was derived more from pervasive fear perpetrated by 
small terrorist elements than by military strength. It was becom- 
ing increasingly evident that the SL had lost most of the coerced 
support that it once had among the peasantry and had failed to 
consolidate whatever supposed political control it had in the high- 
lands, despite, or more likely because of, its savage terror tactics. 
It appeared that what McCormick described as the SL's "control" 
and "commanding position" in the Sierra essentially resulted from 
its filling of a power vacuum rather than from any defeat of the 
army by the guerrilla forces. These SL forces avoided any con- 
frontation with the approximately 3,400 personnel that, accord- 
ing to McCormick, the army had in the field at any one time. 

McCormick' s conventional assessment in congressional testimony 
in March 1992 that the military "must serve as the principal weapon 
in the government's arsenal against the SL" neglected to take into 
account the increasingly stubborn peasant resistance to the SL. This 
was manifested in the proliferation of rondos campesinas (Peasant 
Patrols), which have served as legally recognized self-defense units 
for villages. For years the lightly armed rondas had been ineffec- 
tive. However, during 1992 Fujimori began arming them on a larg- 
er scale, and they soon became more effective than the government's 



xxxvi 



counterinsurgency forces in thwarting the SL's plans for Maoist- 
style domination of the countryside. The 1,500 rondas operating 
in the Mantaro Valley in 1992 dealt major setbacks to the SL in 
this strategic region, which is Lima's breadbasket. Some analysts, 
including McClintock and McCormick, have downplayed the sig- 
nificance of the rondas; others have viewed them in a more positive 
light, especially after the rondas underwent a transformation from 
passivity to a lethal manifestation of popular resistance to the SL. 
Anthropologist Carlos Ivan Degregori has described the rondas as 
the Fujimori government's biggest success in the counterinsurgency 
war. By March 1992, more than 11,000 rifles and shotguns had 
been distributed among the 200,000 members of 526 officially 
registered rondas (which may actually number about 2,000), and 
the Fujimori government began handing out arms to newly creat- 
ed, ronda-like, urban self-defense groups as well. That September 
the government, also using the rondas as a model, provided about 
1,400 shotguns to the Ashaninka, the biggest ethnic minority in 
Peru's Amazonian region and the main target of SL terrorism 
against ethnic groups in Amazonia. 

Raul Gonzalez, a sociologist and Senderologist, has noted that 
the SL began making Lima the focus of its terrorism in 1991 only 
after having lost in the countryside. As it intensified its violence 
in Lima, the SL appeared to be making strong psychological head- 
way in its plan for seizing control of the national capital through 
the use of bullets and bombs instead of ballots. A poll taken in Lima 
in June 1991 by Apoyo found that 41 percent of respondents, total- 
ing 15 percent of Lima's metropolitan population, were able to justi- 
fy subversion as a result of poverty. The poll's most important 
finding had to do with the public's impression of the SL as a polit- 
ical group. The results suggested that an estimated 12 percent of 
respondents in the poorer areas of Lima were concealing their sym- 
pathies for the SL because they feared the security forces. SL leader 
Abimael Guzman Reynoso ("Presidente Gonzalo") had a favorable 
rating of 17 percent in the poorest stratum, and an estimated 38 
percent believed that the SL would be victorious. By September 
1991 , only 25 percent of Lima residents believed that the SL could 
be defeated, according to a survey published in Quehacer. The Lima 
poll results seemed to underscore Doughty' s point that "the inter- 
related ills of poverty, inequity, and ethnoracial discrimination" 
are the basis for the SL's appeal. The resentment of Peru's native 
American and mestizo majority against the European elite that 
traditionally has ruled in Lima has been a driving force behind 
the SL insurgency. 



xxxvn 



Since it began in early 1991, the SL's campaign to infiltrate and 
radicalize Lima's shantytowns has had a clear impact on these huge 
population centers. A poll taken by Apoyo in mid- 1991 found that 
64 percent of Lima residents felt that subversive violence was the 
greatest violence-related problem in Peru, followed by drug traffick- 
ing (16 percent) and abuse of authority and repression (12 per- 
cent). The relatively low concern about repression seemed surprising 
considering that the United Nations Human Rights Commission 
ranked Peru as number one or two among the world's nations at 
causing its own people to "disappear" each year during the 1988-91 
period. In 1990 the number of reported disappearances was 251, 
as compared with 440 in 1989. Other groups, such as Amnesty 
International, put disappearances two or three times higher. The 
United Nations Working Party on Disappeared Persons attribut- 
ed 112 disappearances to Peru in 1992 (still the world's highest 
incidence). 

In a 1991 editorial, Graham noted that the SL, "by targeting 
corrupt officials and allowing nongovernmental and health-care or- 
ganizations to continue operating in Lima's shantytowns, was 
capitalizing on the erosion of state credibility caused by widespread 
corruption and violence." The SL's shantytown tactics turned vio- 
lent, however, and by late 1991 or early 1992 the SL no longer 
fit this Robin Hood-like description. According to political scien- 
tist and Senderologist David Scott Palmer, the SL in early 1992 
was fighting the local grassroots organizations — such as neighbor- 
hood committees, mothers' clubs, soup kitchens, and church- 
sponsored discussion groups — "hammer and tong" and imposing 
its own local organizations. The SL also began assassinating popular 
community leaders, such as Maria Elena Moyano, the courageous 
deputy mayor of Villa El Salvador — Lima's best-organized and larg- 
est shantytown (with 350,000 residents) — who had defiantly resisted 
the SL. As a result of thirty-two attacks in 1992, including ten as- 
sassinations of civic leaders, the SL attained control of Villa El Sal- 
vador's industrial park, many of its soup kitchens, and a local 
council. However, despite its efforts (which included assassinat- 
ing Moyano's successor in January 1993), the SL failed to defeat 
the shantytown 's popular organizations. 

The increasing intensity of SL terrorism and frustration with 
congressional impediments to combatting it and supposedly drug 
trafficking were reported to be major motivations for Fujimori's 
military-backed self-coup (autogolpe) on April 5, 1992. Fujimori cast 
aside Peru's twelve-year-old formal democracy by suspending 
the constitution of 1979, dissolving Congress, and dismissing 
the National Council of Magistrates, the Tribunal of Constitutional 



xxxvin 



Guarantees, and the offices of the attorney general. He announced 
the installation of a Government of National Emergency and Recon- 
struction, headed by Oscar de la Puente Raygada Albela, presi- 
dent of the Council of Ministers and head of the Ministry of Foreign 
Relations. 

Fujimori's abrogation of Peru's democratic system in a blood- 
less autogolpe apparently was more widely denounced outside of Peru 
than inside the country. Major United States newspapers called 
Fujimori a dictator. James A. Baker, then the United States secre- 
tary of state, called the self-coup "unjustified" and "an assault 
of democracy," and the United States suspended US$167 million 
in new aid assistance to Peru. The United States also scuttled a se- 
ries of loans to Peru from industrialized countries and multilateral 
lending organizations. 

A threat interrelated with the insurgency and corruption in the 
military and security forces and one that has concerned the Unit- 
ed States government far more than the governments of Fujimori 
and his predecessors has been drug trafficking. This topic has been 
the dominant issue in United States-Peruvian bilateral relations 
because of Peru's status as the world's largest coca-leaf producer 
(accounting for about 65 percent of total production). In its first 
military training funding for Peru since 1965, the United States 
approved US$35 million in military equipment and training for 
the army and police forces in July 1991 . The accord also provided 
for US$60 million in economic aid to assist coca growers to switch 
to other crops. Peruvians were generally unenthusiastic about the 
interception strategy, however. In 1990 only 11 percent of Peru- 
vians surveyed considered drug trafficking as the nation's most seri- 
ous problem. Echoing this sentiment, Fujimori favored the 
substitution of crops over forced eradication, in open disagreement 
with the United States. 

In reaction to the autogolpe, the United States suspended all mili- 
tary and economic aid and reduced its counternarcotics presence 
in Peru by removing two large radar systems in Iquitos and An- 
doas and withdrawing twenty Special Forces troops, who had been 
training Peruvian police to combat drug traffickers. The Fujimori 
government expressed greater interest in United States assistance 
to the counterinsurgency effort than to the antidrug "war." Fol- 
lowing his autogolpe, Fujimori pleaded in Washington for a US$300 
million military aid package. But the administration of President 
George H.W. Bush was uninterested in Peru's plight. Although 
the army routed the MRTA from its bases of operation in the Mid- 
dle Huallaga Valley in late 1992, the SL remained entrenched in 
Upper Huallaga and Central Huallaga. 



xxxix 



For many Peruvians, the self-coup was a step forward, even 
though Peru's international shunning no doubt had a grave im- 
pact on the millions of Peruvians living in extreme poverty. 
Fujimori's autogolpe actually raised the hopes of many Peruvians, 
who approved of his dissolving Congress and the courts, which were 
widely seen as corrupt and detached from the people. According 
to a poll by the Lima-based Datum, only 16 percent opposed 
Fujimori's decision to modify the constitution, only 12 percent ob- 
jected to his closing Congress, and only 2 percent faulted his in- 
tention to reorganize the judiciary, popularly known as the "Palace 
of Injustice." In the view of 85 percent, Fujimori would "struc- 
ture a more efficient legislature," and 84 percent believed he would 
make the judiciary more honest. In the opinion of 75 percent, he 
would solve the economic crisis, and more than 50 percent believed 
he would defeat terrorism. An Apoyo poll taken at the end of April 
1992 gave Fujimori a record 82 percent level of support. The sec- 
tors of society that were most vocal in supporting the autogolpe were 
the military, local businesspeople and exporters, and the urban mid- 
dle and lower classes. Those sectors most opposed were the for- 
mer parliamentarians, the political class, intellectuals, and sections 
of the media. 

In McClintock's view, an important indicator of Peruvians' sup- 
port for the former democracy was the high electoral turnout: 
approximately 80 percent of registered voters and 70 percent of all 
potential voters in 1985 and 1990. Voting was, to be sure, compul- 
sory. According to surveys by Datum, more than half of those who 
voted in 1 990 would not have bothered had voting not been manda- 
tory. The fine of 20 new soles (about US$12; for value of the new 
sol, see Glossary) was a substantial penalty for most Peruvians, but 
the loss of a day's work to the bureaucracy to pay it was even worse. 

Furthermore, the calls for a "return to democracy" tended to 
overlook the unrepresentative reality of Peruvian democracy as it 
had been practiced under the pseudo-democratic oligarchies of Be- 
launde and Garcia. As Graham points out, by 1990 Peru's 
democratic institutions — the Congress, the judiciary, and politi- 
cal parties — had become generally discredited and the viability of 
Peruvian democracy was threatened by "a crisis of representation." 
The members of the dissolved Congress were seen by most Peru- 
vians as largely representing the white, wealthier residents of Lima. 
According to an Apoyo poll, Peru's citizens defined democracy as 
an elected president and a free press, with no mention of represen- 
tative institutions. Additionally, Palmer notes that the number of 
provinces and department's under military control "substantially 
eroded the formal democratic reality." 



xl 



Popular surveys amply demonstrated the public's distrust of 
Peru's democratic institutions. In a Lima poll conducted by Apoyo 
in 1991, only three of thirteen institutions listed — the Roman 
Catholic Church, the media, and the armed forces — generated more 
trust than distrust. Congress, which engendered the most distrust, 
was distrusted by 72 percent and trusted by only 19 percent. Fol- 
lowing close behind was the judiciary, which was distrusted by 68 
percent and trusted by only 22 percent. The presidency was dis- 
trusted by 61 percent and trusted by only 26 percent. The Coun- 
cil of Ministers was distrusted by 60 percent and trusted by only 
24 percent. The National Police (Policia Nacional — PN) was dis- 
trusted by 61 percent and trusted by only 33 percent. Political par- 
ties inspired the trust of only 13 percent of polled citizens, whereas 
76 percent distrusted them. 

Low wages made both police personnel and judges, like many 
other public officials, susceptible to bribery and contributed to the 
inefficiency of the PN and the judiciary. A reported 1,300 police- 
men were dismissed in 1991, with many being sent to prison for 
involvement in offenses ranging from highway robbery to extor- 
tion and maltreatment of detainees. 

Fujimori actively sought a reformed version of Peru's short-lived 
democracy, even "a profound transformation," not a return to 
it. In a remark quoted by the New York Times, political scientist 
Robert Pastor alluded to the inherent contradiction in the "return 
to democracy" argument. "Simply restoring the democratic sta- 
tus quo ante," Pastor said, "will not work because it was not work- 
ing before." Bernard W. Aronson, the United States Department 
of State's assistant secretary for inter- American affairs, noted to 
Congress on May 7, 1992, that "ironically, nobody in Peru, 
whether the opposition or the Fujimori government, is arguing they 
should go back to the status quo ante of April 5; nobody is quar- 
reling with the need for fundamental reforms." That, indeed, was 
Fujimori's announced plan. The question remained whether he 
was sincere in wanting to implement it in a timely manner, or would 
remain "emperor" for ten years. (Fujimori had quipped to a meet- 
ing of businesspeople in April 1992 that Peru needed an emperor.) 

During the remainder of 1992, Fujimori seemed serious in his 
stated mission to "moralize" and reform what had been a corrupt 
and unrepresentative pseudo-democracy. In his speech to the Or- 
ganization of American States (OAS — see Glossary) meeting in 
Nassau, the Bahamas, on May 18, and in his message to the na- 
tion on July 28, Fujimori committed himself to reestablishing full 
institutional democracy. He also underscored the main deficiency 
of the defunct democracy — the fact that representatives did not 



xli 



represent and were not accountable to their districts. He maintained 
that the country's political party system was basically undemocratic 
because the parties were dominated by professional cliques (cupu- 
las), who restricted membership and imposed their handpicked can- 
didates for elective posts from closed lists (listas cerradas). He added 
that party influence had spread to virtually all social institutions, 
which were thus forced to be linked to the " party ocracy." 
Fujimori's conciliatory speech, combined with factors such as his 
domestic popularity, international pressure, and Bolofia's efforts 
to win "reinsertion" in the international financial community 
helped to explain why the OAS's response to the self-coup was 
generally mild. The government of Japan, by conditioning Japanese 
aid on a swift return to democracy, reportedly was crucial in per- 
suading Fujimori not to delay in carrying out his promise to cre- 
ate a new democratic system. 

During 1992 Fujimori enacted reforms aimed at modernizing 
the whole political system, and he also sought to include the eco- 
nomic and social structures, including the educational system, in 
this modernization program. In the political arena, he proposed 
creating a system that would give power to the people rather than 
the leading cliques in the political parties. The centerpiece of the 
new system was the Democratic Constituent Congress (Congreso 
Constituyente Democratico — CCD), an autonomous, supposedly 
"sovereign," single-chamber body designed to temporarily replace 
the dissolved Congress, revise Peru's constitution of 1979, serve 
as a legislature until the end of Fujimori's legal term in July 1995, 
and reorganize the judiciary. 

Fujimori quickly forged a consensus on the need for a reform 
of the judiciary and for establishing a mechanism to reform the 
constitution of 1979. A month after his self-coup, Fujimori put the 
prisons under the control of the National Police, restored order in 
them, and improved conditions for inmates. However, little head- 
way was made to reduce the huge backlog of cases awaiting trial. 
In August 1992, he completed the tightening of the judicial sys- 
tem to deal more effectively with subversive groups by adopting 
the Colombian practice of trial by "faceless" judges. Fujimori's 
earlier martial law decree ensured that anyone charged with homi- 
cide would be tried by military tribunals. All other terrorist-related 
offenses would be tried summarily by the anonymous judges, who 
would sign their verdicts with code names. Terrorist offenses would 
be categorized as treason, punishable by a sentence of life imprison- 
ment instead of the previous maximum of twenty-five years. Judi- 
cial reforms enacted by the CCD in March 1993 included a new 
system for the appointment of judges, a task previously performed 



xlii 



in a politicized fashion by the National Council of Magistrates. 
The reform supposedly eliminated political interference by the ex- 
ecutive and legislative branches in the designation of judges by giv- 
ing the Council and the District Councils exclusive responsibility 
for the selection, appointment, and promotion of judges. Another 
reform was the creation of the School for Magistrates (Academia 
de la Magistratura). 

Fujimori also sought to expedite the decentralization and decon- 
centration of power through the transfer of power and resources 
to local government. The establishment of regional governments 
in Peru had been proceeding slowly since 1980. Two weeks after 
his autogolpe, Fujimori dissolved the existing regional assemblies and 
regional councils of all regional governments, which he had lam- 
basted as corrupt and inefficient forums that were obstructing his 
economic reforms. Most of the existing regional structures were 
controlled by left-of-center opposition parties, including Garcia' s 
American Popular Revolutionary Alliance (Alianza Popular Revo- 
lucionaria Americana — APRA). 

The CCD was tasked with reassessing the interrupted region- 
alization process and deciding whether to retain the model 
prescribed by the 1988 Law on Regionalization Bases or set new 
guidelines that would correct the previous system's errors. The 
Fujimori government regarded the regionalization program as a 
bureaucratic nightmare and advocated a process of decentraliza- 
tion. It favored setting up four or five macroregions that would 
be able to coordinate large projects involving vast contiguous geo- 
graphic areas. These macroregions would be intermediate units 
facilitating development, territorial organization, and administra- 
tion between the central and municipal governments. The state 
would thus be organized into two levels: the central government, 
with regulatory and supervisory functions, and the municipal 
governments, for which the regional entity would serve an adminis- 
trative function (although Lima and the constitutional province of 
Callao would have the same mayor, Callao would retain control 
of its own revenues and benefits). To this end, a decree established 
a Provisional Administrative Council (Consejo Administrative 
Provisional) in each region. 

Fujimori stated on several occasions during 1992 that no politi- 
cal or economic reforms would succeed unless the SL insurgency 
was defeated first. The SL and MRTA initially had welcomed the 
autogolpe, expecting that repression would further polarize the coun- 
try. Instead, repression did not materialize and the SL suffered 
its first major reversal when the National Counterterrorism Divi- 
sion (Direccion Nacional Contra el Terrorismo — Dincote) finally 



xliii 



caught up with Guzman and other top SL leaders on September 
16, 1992. Once again, the army was upstaged in the counter- 
insurgency war. Whereas Fujimori's support had slipped to a still 
impressive 65 percent in an Apoyo poll taken on July 12, 1992, 
when the SL offensive in Lima was intensifying, and to 60 percent 
in early August, an Apoyo poll published on September 20 gave 
him a healthy 74 percent level of support. In terms of political power 
in Peru, Guzman was ranked number three in mid- 1992 by Debate 
magazine's annual survey of power in Peru, as based on an opin- 
ion poll. Taking advantage of Guzman's capture, Fujimori also 
launched a diplomatic campaign against the SL's networks in Eu- 
rope and the United States. He described the networks as consist- 
ing of thirty-six organizations and about 100 members, mostly 
Peruvians, who acted as SL "ambassadors" responsible for dis- 
tributing propaganda and raising funds. 

In the wake of Guzman's capture, the SL's prospects for seiz- 
ing power seemed greatly diminished. Journalist Gustavo Gorriti 
Ellenbogen noted in Lima's centrist Caretas news magazine that 
while Guzman was operating underground, his cult of personality 
was the SL's principal weapon. Gorriti added that with Guzman's 
capture this cult became the SL's greatest point of vulnerability 
and probably will have ' ' a corrosive and destructive effect on Shin- 
ing Path. " Dincote not only captured the SL's guiding light, thereby 
destroying his mythical status, but also effectively decapitated the 
SL's organizational leadership and dismantled its Lima appara- 
tus, both of which were led to a large extent by women. 

Peruvian women traditionally have been excluded from male- 
dominated institutions at all levels of government and subjected 
to a multitude of other social injustices. Some of the more activist 
women have had a fatal attraction to the SL, which has vowed to 
sweep away these discredited governing structures and replace them 
with female-dominated "people's committees." The SL's female 
members proved to be as ruthless as its male members, and ap- 
parently more dominant. Before the arrests in September and Oc- 
tober 1992, women had constituted a reported 56 percent of the 
SL's top leadership. In 1992 at least eight members of the SL's 
nineteen-member Central Committee were women. Also captured 
with Guzman was Elena Albertina Iparraguirre Revoredo ("Mi- 
riam"), who occupied the number- two position in the SL's top 
decision-making body, the Politburo (which had various names). 
Captured documents enabled Dincote to neutralize the SL's Lima- 
based organization with the arrests of other key female leaders, such 
as Laura Zambrano Padilla ("Comrade Meche"), a former teacher 
who had headed the SL's Lima Metropolitan Committee, which 



xliv 



planned and implemented terrorist actions in the capital. The right- 
of-center Expreso reported that the SL had lost about 70 percent 
of its ruling cadres because of the arrests. In October security forces 
captured four of the five top leaders of Popular Aid (Socorro Popu- 
lar), another SL group responsible for SL military operations in 
Lima. Among those captured was Martha Huatay Ruiz ("Tota"), 
a lawyer and reportedly the SL's highest-ranking leader still at large. 
At the end of 1992, Fujimori claimed that 95 percent of the SL 
leadership had been captured and imprisoned for life. 

In late June 1993, Dincote reported the new SL leadership in 
Lima to be Maria Jenny Rodriguez ("Rita"), first-in-command; 
Ostap Morote, second-in-command; and Edmundo Cox Beuzevilla, 
third-in-command. SL leaders in northern, southern, and central 
Peru were, respectively, Teresa Durand Araujo ("Juana," 
"Doris"), Margie Clavo ("Nancy"), and Oscar Ramirez Durand 
("Feliciano"), the latter the son of an army general. 

Despite the SL's leadership losses, its terrorist capability and clan- 
destine military structure remained largely intact and continued 
to pose a serious threat. Funded with millions of dollars in drug 
"taxes," the SL entered a new phase of its multistaged war in the 
second half of 1992. It passed from what it grandly termed "stra- 
tegic balance" (with the army) to "strategic offensive," which in- 
cluded striking at prominent targets in Lima. SL attacks actually 
intensified after Guzman's arrest, although the statistics vary widely. 
De Soto's Legal Defense Institute (Instituto de Defensa Legal — 
IDL), itself the target of SL bomb attacks on two occasions, reported 
that the SL perpetrated 474 attacks nationwide in the three months 
after Guzman's capture, killing 365 people, or about 25 percent 
more than in the three months preceding Guzman's arrest. The 
Lima-based Institute for National Defense Research (Instituto para 
Investigaciones de la Defensa Nacional — Iniden) reported that 653 
people were killed as a result of 502 terrorist attacks perpetrated 
during the three months that followed Guzman's arrest. Peru's most 
violent month of 1992 was November, when 279 people were killed 
in 226 terrorist attacks, according to Iniden. The fatal casualties 
that month included seventy-five SL militants, ninety-two MRTA 
members, nine soldiers, thirteen members of the PN, and ninety 
civilians. The stepped-up violence reflected growing desperation 
on the part of both terrorist groups. 

Fujimori continued to rely mainly on further militarization of 
the government's counterinsurgency efforts against the SL. 
However, many members of the military and PN — demoralized 
by low salaries, corruption, and obsolete equipment — lacked the 



xlv 



sense of mission that their counterparts in Chile, Argentina, and 
Uruguay had when threatened by urban terrorism. Thus, in ad- 
dition to the SL and MRTA, Fujimori had to cope with the ever- 
present threat of a military coup. Discontent within the ranks report- 
edly had been mounting during 1992 as a result of what military 
commanders viewed as the army's loss of institutional status, 
reduced prestige in society, low pay, and the military's politiciza- 
tion by the government. Former president Belaunde called for a 
military coup against Fujimori to return the nation to democracy, 
implying that the military would graciously return to the barracks 
after overseeing a quick transition to democratic rule. (Having him- 
self been overthrown by the military in 1968, Belaunde sounded 
more like an oligarch than a democrat.) 

Military resentment focused in particular on Vladimiro Mon- 
tesinos Torres, a shadowy adviser of the presidency in internal secu- 
rity affairs accountable only to Fujimori. Montesinos has served 
as Fujimori's reputed intermediary with the faction of the military 
that has been Fujimori's main base of support. Montesinos report- 
edly was seen by the military as having obtained too much influence 
over promotions in the armed forces and too much power over the 
National Intelligence Service (Servicio de Inteligencia Nacional — 
SIN), which he designed. According to the London-based Latin 
America Monitor, Captain Montesinos was expelled from the army 
in 1976, allegedly for selling military secrets to foreigners (the 
charges were later dropped), and spent a year in prison for dis- 
obedience. He then earned a degree in criminal law and "amassed 
a fortune by defending and representing drug traffickers." 

The degree of influence that Montesinos had in Fujimori's in- 
ner circle was reflected in Debate's 1991 annual survey, which put 
Montesinos in twelfth place. But in the Lima magazine's 1992 poll, 
Montesinos rose to fourth place. The negative press reports and 
the military resentment failed to sway Fujimori's unflinching con- 
fidence in Montesinos. Describing Montesinos as a "good friend," 
Fujimori somewhat implausibly denied that Montesinos support- 
ed any promotions or even that he served as an adviser. Given the 
military's fickle support of Fujimori, the Montesinos factor appeared 
to be a potentially risky test of Fujimori's authority over armed 
forces traditionalists and some congressmen. Palmer has posed 
pointed questions as to why the military has allowed itself to be 
subjected to Montesinos 's machinations, and whether this is a sign 
of military weakness. Possible explanations appeared to be in Mon- 
tesinos 's ability to purge the military of any independent-minded 
officers and in Degregori's observation that the military's power 
had diminished. Moreover, as political scientist Enrique Obando 



xlvi 



has noted, a legislative decree of November 1991 gave Fujimori 
himself the power to choose the command of the armed forces, there- 
by making political loyalty a more important qualification than 
professional capability. 

Thanks in no small part to Montesinos, Fujimori did not ap- 
pear to be in the process of becoming a figurehead president like 
Uruguay's Juan Maria Bordaberry Arocena (1972-76), who gave 
free rein to the military to eliminate the urban Tupamaro guerril- 
las only to be later replaced by a military man. Although Fujimori 
was hardly immune from a similar fate, Graham's assertion that 
"the situation under Fujimori was one of de facto military con- 
trol" seemed to be contradicted somewhat by Montesinos 's in- 
fluence, the military's continuing salary grievances, and Fujimori's 
success thus far in removing military commanders whenever they 
appeared to pose a potential threat to his authority. Nevertheless, 
as Graham points out, Fujimori's minister of interior and his 
minister of defense were both army generals. And the military clear- 
ly had become more politicized during the Fujimori administra- 
tion. This fact was demonstrated by Fujimori's personal 
involvement in military promotions and by a political speech given 
in front of him by Major General Nicolas Hermoza Rfos, on tak- 
ing over the Armed Forces Joint Command on January 2, 1992. 
Whether Fujimori would succeed in keeping the military at bay 
remained to be seen, but politicizing the institution risked divid- 
ing it. Fujimori publicly reiterated that "political power rules over 
the military, and the president is the supreme commander of the 
armed forces." Nevertheless, the depth of Fujimori's power over 
the military was still unclear in early 1993. 

A lack of total control by Fujimori over the military was sug- 
gested by credible allegations that extremist elements of the army 
were operating with impunity by carrying out extralegal actions 
against suspected terrorists, without Fujimori's knowledge. Dur- 
ing the Garcia government, a paramilitary death squad called the 
Rodrigo Franco Command operated as an extralegal enforcement 
arm of the APRA under the direct control of the minister of in- 
terior. To the extent that Fujimori proves unable to rein in the 
military extremists, they could pose a potential threat to his au- 
thority and further jeopardize the human rights standing of his 
government. According to the United Nations, the number of 
"extra-judicial executions" was rising during Fujimori's govern- 
ment from 82 in 1990 to 99 in 1991 and 114 in 1992. 

Discontent was rife in the Peruvian military in 1992. A press- 
ing military issue in Peru seemed to be morale problems fueled 
by low military salaries. By 1992 monthly pay for a captain had 



xlvii 



declined to about US$120; a major, US$230; a colonel, between 
US$250 and US$300; and a general, between US$300 and US$500. 
Low pay presumably was a major reason for the high desertion 
rates, estimated during 1992 at 40 percent of conscripts and thirty- 
five trained officers a month. By the time of Fujimori's autogolpe, 
military unrest over low salaries reportedly had become intense, 
with a widening split between low-ranking and high-ranking 
officers. Indeed, in early 1992 a secretive cabal of middle-ranking 
officers, called Comaca (Commanders, Majors, and Captains), 
formed to plan rebellions against corrupt military leaders. Fujimori's 
failure to deliver on his pre-autogolpe promise to improve military 
pay was particularly upsetting to many soldiers and middle-ranking 
army officers, many of whom had expected significant salary in- 
creases in exchange for supporting the self-coup. 

Fujimori took a risk by giving up his constitutional legitimacy 
and putting himself at the disposal of the military while co-opting 
the top military leadership. This fact became evident on Novem- 
ber 13, 1992, when three recently retired generals, including the 
commander of the army, led a coup attempt that was crushed by 
the loyal military. The abortive action reportedly was motivated 
by a variety of factors, including grievances over low salaries and 
promotions and Fujimori's announced stand to punish navy officers 
involved in an embezzlement scandal. Another reported reason was 
his November 13 decree granting him direct authority to dismiss 
and assign all military officers above the rank of lieutenant (previ- 
ously, officers could be removed only on retirement or for miscon- 
duct). Several of the coup plotters had been summarily retired from 
active service by Fujimori and Montesinos. 

Fujimori claimed that opposition politicians were behind the coup 
attempt and that it was also a plot to prevent the CCD elections 
and to assassinate him. Whatever its motivations, he appeared to 
have calculated correctly that his popular support and the 
predominantly loyal military would obviate a military coup and 
that the armed forces did not want to take control and hence to 
assume responsibility for the nation's economic, social, and polit- 
ical crises (for which they already bore much blame from the dis- 
astrous period of military rule in 1968-80). Nevertheless, Fujimori's 
heavy-handed treatment of the coup members reportedly caused 
widespread resentment within the armed forces. Breaking with mili- 
tary tradition, the government incarcerated the conspirators in the 
civilian Canto Grande Prison instead of in a military prison. Brigade 
General Alberto Arciniega Huby, a member of the Military Tri- 
bunal that had summarily condemned Guzman to life imprisonment 
and fined him about US$25 billion, fled into exile after being 



xlviii 



retired for criticizing the imprisonments of the coupists. (Two gener- 
als who led the coup attempt later received seven- to eight-year 
prison terms, and twenty-six other military officers were given pris- 
on sentences ranging from six months to seven years. However, 
eleven of the officers received presidential pardons in May 1993, 
and most others were expected to be pardoned as well.) In the anal- 
ysis of Enrique Obando, the coup attempt constituted the begin- 
ning of a struggle in the army between "institutionalist" officers, 
represented by the coup members, and the "co-opted high com- 
mand," a struggle likely to be a continuing source of instability 
for the government. 

The election of the CCD's eighty members in a single nation- 
wide district went ahead as scheduled on November 22, 1992. 
Fujimori's New Majority Movement (Movimiento Nueva Mayo- 
na)-Change '90 coalition won control of the CCD by garnering 
43 percent of the vote and 44 seats (almost the same number of 
seats that Change '90 had in the former 240-member Congress). 
Nevertheless, Fujimori had expected to win 50 seats. The eigh- 
teen other political groups that participated in the CCD elections 
did not include Garcia' s APRA and a number of other leftist par- 
ties, nor Belaunde's AP or Vargas Llosa's Liberty Movement, all 
of which boycotted them. The conservative PPC contested the elec- 
tions and won 7.7 percent of the vote, or nine seats. About 22 per- 
cent of the voters cast blank or deliberately spoiled ballots. In an 
internal CCD election held on December 29, New Majority's lead- 
er, Jaime Yoshiyama Tanaka, a Harvard-trained economist who 
had been serving as Fujimori's minister of energy and mines, was 
elected CCD president with 60 votes in favor (15 ballots were blank). 

Some Peru analysts found fault with the CCD elections. McClin- 
tock accused Fujimori of "manipulating" them. In her view, the 
elections were "very problematical" because "there were many 
delays in the recognition of lists and the campaign time was very 
short." Critics also contended that the electoral rules were skewed 
in Fujimori's favor and that the CCD was designed to be subser- 
vient to executive authority. Nevertheless, 200 OAS observers de- 
termined that the elections were open and fair. 

Despite the CCD elections, United States-Peruvian relations re- 
mained cool in late 1992. The United States lacked any apparent 
role or influence in Lima and did not even have an ambassador 
in Lima, in part because its ambassador's residence suffered ex- 
tensive damage from a massive SL car bomb in February 1992 
(a new ambassador was scheduled to assume the post in 1993). Fol- 
lowing the CCD elections, Japan, attracted by Fujimori's ances- 
try and the absence of the United States, remained the major foreign 



xlix 



player in Peru, providing US$400 million in aid in 1991 and sub- 
stantial amounts in 1992 as well. The United States began to show 
some interest, however, by agreeing to jointly lead, with Japan, 
the Support Group (Grupo de Apoyo) for Peru for 1993. The ad- 
ministration of President Bill Clinton concluded in March 1993 
that Peru's human rights record had improved sufficiently to justify 
United States assistance to Peru in the payment of its arrears with 
the International Monetary Fund (IMF — see Glossary) and the 
World Bank (see Glossary). 

As in Bolivia, the United States strategy to interdict drugs and 
reduce coca- growing had made very little progress and lacked public 
support. By late 1992, less than one-half of 1 percent of raw co- 
caine reportedly was being intercepted, and coca-growing was ex- 
panding at a rapid rate. In contrast, legal agriculture remained 
stagnant. The United States Drug Enforcement Administration's 
largest and most important base in Latin America continued to 
operate at Santa Lucia in the Upper Huallaga Valley. According 
to Lima's La Republica, drug-trafficking activities had increased in 
the Huallaga region by late November 1992, aided by the protec- 
tion of some army and PN forces in the area. Some independent 
journalists reportedly had been threatened and occasionally assas- 
sinated by narco-hit men for reporting on military corruption. In 
March 1993, Defense Minister Victor Malca Villanueva informed 
the congressional drugs commission that seventy-four members of 
the armed forces were being tried for drug trafficking, but he de- 
nied that armed forces officers were paying bribes in order to serve 
in cocaine zones. 

On the economic front, trends reportedly were beginning to tilt 
slightly in Fujimori's favor by the end of 1992, according to 
economist John Sheahan. Inflation was down from 60 percent a 
month at the end of Garcia 's presidency to 3.8 percent, mainly 
as a result of the tough economic-adjustment program introduced 
prior to the autogolpe. The accumulated inflation rate for 1992 
amounted to 56.7 percent, the lowest rate in fifteen years. In ad- 
dition, the US$22-billion debt was being serviced, the budget was 
being balanced, the nation's reserves had been restored to almost 
US$2 billion, privatization was proceeding, and Fujimori's incen- 
tives for foreign investment were technically among the most com- 
petitive in Latin America. The privatization process, which began 
in May 1992 with the government's announcement of its plans to 
sell off all 200 of its money-losing state companies, encountered 
a series of snags during the year. Nevertheless, Peru's first major 
sale of a state-owned industrial enterprise, the Hierroperu, S.A., 
mining company, went to a Chinese state-owned corporation, 



1 



making China the second-largest foreign investor in Peru, after 
the Southern Peru Copper Corporation. 

The improving direction of some economic indicators, however, 
still did little to alleviate the plight of most Peruvians, who were 
consumed with the daily struggle for survival. The gross domestic 
product (GDP — see Glossary) fell in 1992 by about 3 percent, in 
a continuing recession. The lower class was living on survival wages 
and meager earnings, and the middle class was becoming increas- 
ingly impoverished. Per capita income had regressed to 1960s lev- 
els. In 1992 only 15 percent of Lima's work force was employed 
adequately, as compared with 60 percent in 1987. State employees 
reportedly were earning only 15 percent of what they did in 1988. 
By early 1993, the public sector had shed 500,000 employees since 
Fujimori's election, or about half of the country's total public-sector 
workforce. As a result of the government's attempts to modernize 
the agricultural sector by opening the market and eliminating credits 
and subsidies, many farmers were finding coca to be the only 
profitable crop. The expansion of coca-growing was accelerating 
ecological devastation in Amazonia. In short, the country's eco- 
nomic plight was profoundly altering Peru's society and en- 
vironment. 

Nevertheless, in late 1992 Sheahan saw some basis for optimism 
if more directive economic strategies were adopted to reduce 
poverty, to make the export sector more competitive (Peru's new 
sol had become overvalued as a result of excessive inflow of dol- 
lars, making exports less competitive), and to establish a stronger 
tax base. The latter, the Achilles' heel of the economy, was de- 
pendent on the willingness of middle- and upper-income groups 
to accept higher taxation, a necessity to avoid inflation, according 
to economist Jeffrey D. Sachs. Fujimori's sharp increase in property 
tax rates in 1991 created a public outcry, but inflation was brought 
under control. In Sheahan 's analysis, Peru had nearly all the eco- 
nomic conditions needed for economic reactivation without infla- 
tion: underutilized capacity of the industrial sector, an abundance 
of skilled and unskilled labor, and growing capital imports needed 
for rising production. 

How committed Fujimori was to fully reinstituting a democrat- 
ic system remained to be seen. His government decreed somewhat 
prematurely on December 29, 1992, that it had ended the transi- 
tional stage to democracy with the installation of the CCD. The 
Fujimori government clearly improved its semi-legitimacy by hold- 
ing the second national electoral process since the autogolpe — the 
municipal elections of January 29, 1993, which were also moni- 
tored by OAS observers. In contrast to the November 1989 



ii 



municipal elections, which the SL disrupted by selective assassina- 
tions of mayors and mayoral candidates, some 12,000 candidates, 
spurning SL threats, registered without incident for the local 1993 
elections in 187 provincial mayoralties and 1,599 district mayoral- 
ties, even in the SL's traditional stronghold of Ayacucho. The elec- 
tions swept nonideological independents into office across the country, 
at the expense of candidates from the traditional political parties and 
Fujimori's New Majority Movement-Change '90 coalition of allied 
independents. This political trend was most evident in Lima, whose 
independent mayor, Ricardo Belmont Cassinelli, was reelected with 
nearly 48 percent of the votes. APRA, which had long dominated 
politics, did poorly in the municipal elections, winning only two 
mayoralties in its traditional stronghold in the north; its mayoral 
candidate in Lima received only 3 percent of the vote. 

Contrary to the judgments of his foreign critics, Fujimori did 
not fit the mold of a traditional Latin American dictator. In a 1993 
article, McClintock labeled Fujimori a "caudillo, ' ' a term usually 
denoting a military dictator (but occasionally a civilian one) in- 
terested in maintaining power at any cost, maximizing personal 
gain, and exercising extremely repressive rule. This generally ac- 
cepted defmition, although applicable to caudillos such as 
Nicaragua's General Anastasio Somoza Debayle and Chile's Gener- 
al Augusto Pinochet Ugarte, did not seem to fit Fujimori. His 
uncaudillo-like style of governing has been described as efficient, 
unconventional, anti-establishment, combative, brusque, astute- 
ly cautious, pragmatic, enigmatic, and low-profile. Fujimori has 
also been described by foreign journalists as an autocrat, a term 
denoting that he rules with unlimited power and influence. Yet, 
it seemed clear that his power over and influence with the military 
has been tenuous, and that he was not immune from being over- 
thrown by the armed forces. His overthrow, moreover, would, as 
Degregori has warned, create a "political vacuum." That scenario 
could allow a real caudillo to take power. 

Although he sought to emulate Pinochet's authoritarian im- 
plementation of a free-market economy, Fujimori's rule appeared 
to be no more than moderately repressive and far more responsive 
to international pressures to restore a democratic system. Few dic- 
tators or autocrats have been known to visit urban shantytowns 
and rural squatter settlements every week and to enjoy such high 
popularity ratings, as Fujimori has, to the consternation of the elites 
and his foreign critics. Polls throughout 1992 indicated that he con- 
tinued to be viewed as one of Latin America's most popular presi- 
dents. According to a poll conducted in Lima by the Imasen 
Company in December 1992, Fujimori was maintaining his 



in 



popularity at 63.3 percent. Even his countersubversive policy 
received a 74-percent approval rating in a poll conducted in Lima 
in January 1993. 

An antipolitician and an authoritarian with a sense of mission, 
the professorial Fujimori seemed more like a president intent on 
"moralizing" and reforming Peru. He was clearly determined to 
make those in positions of responsibility accountable for violations 
of the public trust. "If we want moralization, we must be dras- 
tic," he told Peruvian journalists in an interview on January 2, 
1993; "there are no partial solutions." He was particularly deter- 
mined to make Garcia an example by seeking to extradite him from 
Colombia to face trial for embezzlement of US$400,000 of state 
money and theft of US$50 million from the Central Bank during 
his term. Fujimori applied his reformist zeal as equally to the Minis- 
try of Foreign Relations and the School of Diplomacy as to the legis- 
lative and judicial branches. Explaining that Peruvians had a right 
to expect results from the US$50 million per year spent by the minis- 
try, Fujimori purged 117 diplomats (a fifth of the diplomatic corps), 
who failed to meet his standards; replaced the traditional system 
of political appointment of ambassadors with a merit-based sys- 
tem; and opened up the elitist School of Diplomacy to nondiplomats. 

In early 1993, the Fujimori government appeared to be making 
some progress in pulling the economy out of its deep recession, 
despite another change in the post of minister of economy and 
finance. Carlos Bolona, who oversaw the deregulation of almost 
every aspect of economic activity, resigned over his opposition to 
Fujimori's plan to relax the rigid economic program. He was 
replaced on January 8 by Jorge Camet Dickman, Fujimori's former 
minister of industry, domestic trade, tourism, and integration and 
former head of Peru's most important business association. Camet 
vowed to continue Bolona' s economic program, but with greater 
support to social sectors. Camet was known as a successful engineer 
and entrepreneur, but, unlike Bolona, he reportedly lacked any 
experience in negotiating international financial agreements. In 
the wake of Bolona' s departure, annual inflation raised its head 
again, totaling 17.5 percent in the first quarter. However, Peru's 
first-quarter gross national product (GNP — see Glossary) grew 2.3 
percent from the same period in 1992. 

Fujimori seemed to be moving in the direction of building a 
reformed and more democratic governing system, and he fully ex- 
pected to complete his term of office, barring an ill-conceived mili- 
tary coup by army officers on the payroll of drug traffickers or 
assassination by the extreme right or left. As of mid-June 1993, 
however, Graham's assertion that Fujimori's self-coup "played into 



liii 



into the SL's strategy of provoking a coup in order to polarize so- 
ciety into military and nonmilitary camps" fortunately had not yet 
been validated. The elections for a broadly based CCD and 
municipal governments were steps in the right direction, but the 
formal transition to a reformed democracy awaited the adoption 
of a new, improved constitution pending the holding of a national 
referendum. The draft of the new constitution, published in May 
1993, contains 148 new articles, 93 modified articles, and 59 un- 
changed articles of the constitution of 1979. 

Even with a new constitution, questions as to the CCD's auton- 
omy would likely continue, and some freedoms normally expect- 
ed of democracy probably would remain restricted. For example, 
although both Fujimori and General Juan Enrique Briones Davi- 
la, the minister of interior, claimed in January 1993 that total free- 
dom of the press existed throughout the nation, new legislation 
providing life sentences to journalists convicted of being "apolo- 
gists of terrorism" was intimidating to reporters. Some limited press 
restrictions had been imposed, primarily against newspapers af- 
filiated with the SL and the MRTA. Americas Watch, a New York- 
based human rights group, reported in early 1993 that "Freedom 
of the press in Peru is steadily eroding in what appears to be a broad 
campaign by the Fujimori government to intimidate or silence critics 
and political opponents." In early 1993, Enrique Zileri Gibson, 
editor of the weekly news magazine Caretas, was barred from leav- 
ing the country, and his assets were frozen under the terms of his 
sentence for defaming Montesinos by characterizing him as a 
"Rasputin." (If there is an indirect analogy between the illiterate 
mystic Rasputin and the well-informed Montesinos, it may be found 
in Rasputin's influence over Tsarina Alexandra on appointments 
and dismissals of high-ranking government officials and in Tsar 
Nicholas II's decision to ignore continued allegations of wrongdo- 
ing by Rasputin after expelling him once, only to have the tsarina 
return him to the palace.) Despite the Fujimori government's ac- 
tion against Zileri, Caretas continued to publish articles critical of 
the government and Fujimori in particular. Fujimori, for his part, 
continued to make himself accessible to the press by giving lengthy 
weekly interviews in which he has shown himself adept at putting 
a favorable "spin" on the news. 

His critics notwithstanding, Fujimori was convinced that his 
authoritarian measures were rapidly pacifying Peru and setting the 
stage for a free-market economic boom in the mid-1990s. He was 
expected to continue pushing ahead with liberal policies, speeding 
up the privatization process, controlling inflation, and promoting 
the international reinsertion of Peru. Indeed, in sharp contrast to 



liv 



Peru's standing in 1991, investor confidence in Peru was soaring 
by early 1993, buoyed by government progress against terrorism, 
the IMF's endorsement of the country's economic program, and 
Fujimori's liberal foreign investment regulations. Lima's stock index 
had risen in real terms by 138 percent, one of the highest rankings 
in terms of growth among world markets. France's Credit Lyon- 
nais (a state-owned bank slated to be privatized) became the first 
foreign bank in many years to assume majority control of a Peru- 
vian bank, the Banco de Lima. Nevertheless, businesses still faced 
terrorist sabotage, deteriorating infrastructure, and miserable so- 
cial conditions. It seemed doubtful that Peru would be able to imi- 
tate the example of its far more developed and democratic southern 
neighbor, Chile, whose economy was booming as a result of eco- 
nomic and political reforms. Peru's intractable problems, particu- 
larly the poverty of the great mass of Peruvians and the rapidly 
growing population rate, weighed heavily against the nation's emu- 
lation of Chile's rising level of development. But Fujimori, in con- 
trast to his status quo predecessors, namely Garcia and Belaunde, 
appeared to be making progress in moving the country in the direc- 
tion of significant political and economic reforms and eventual defeat 
of the SL and the MRTA (the latter was nearly neutralized in April 
1993 with the recapture of a top leader, Maria Lucero Cumpa 
Miranda). 

Peruvians, for their part, expected Fujimori to keep to his timeta- 
ble of eliminating the SL threat by the end of his term on July 28, 
1995. In 1992 Senderologists had differing views on the SL's chances 
of seizing power before the end of the twentieth century, as it had 
vowed to do. McCormick was among those who considered an SL 
victory by 2000 to be likely. Others, including Palmer, asserted 
that the Fujimori government was stronger than assumed, that the 
SL was weaker than assumed, and, thus, an SL takeover was un- 
likely. In the more blunt assessment of Raul Gonzalez, the SL's 
chances of seizing power were "nil." In April 1993, with most SL 
leaders in prison, the latter two views appeared to be closer to the 
mark. Nevertheless, the SL reportedly had decided on a strategy 
of total militarization and appeared to be still capable of continu- 
ing its terrorist activities indefinitely. 

Peruvians also expected Fujimori to comply with the results of 
the 1995 presidential elections, even though his authoritarian ten- 
dencies seemed to run counter to his oft- stated intention to step 
down at the end of his term in 1995. In early January 1993, he 
signed some fifty decrees designed to consolidate presidential power 
before the CCD became operational that month. These decrees 
included a provision — approved by the CCD and included in the 



Iv 



draft of the new constitution — for successive presidential reelec- 
tion and the less justifiable power to dissolve Congress. With a 66 
percent approval rating in June 1993, according to Apoyo, it seemed 
conceivable that Fujimori could complete his semi-legitimate term 
with a substantial measure of his extraordinary popularity intact. 
Although the Apoyo poll found that only 41 percent of the popula- 
tion would reelect him in the 1995 election, a Datum survey, also 
conducted in June 1993, showed that 58 percent supported his re- 
election in 1995. Should Fujimori decide in April 1995 to be a can- 
didate, he could remain an "emperor," with a renewed mandate 
of legitimacy, for much of the decade by winning reelection. 
However, if he failed to restore full democratic freedoms and guaran- 
tees of respect for human rights, he risked renewed international 
isolation of Peru, which would likely have grave consequences for 
the economy, political stability, and the counterterrorism war. 

June 30, 1993 Rex A. Hudson 



lvi 



Chapter 1. Historical Setting 




Machupicchu ruins 



AS THE CRADLE of South America's most advanced native 
American civilizations, Peru has a rich and unique heritage among 
the nations of the southern continent. It encompasses a past that 
reaches back over 10,000 years in one of the most harsh and in- 
hospitable, if spectacular, environments in the world — the high 
Andes of South America. The culmination of Andean civilization 
was the construction by the Incas, in little more than one hundred 
years, of an empire that spanned a third of the South American 
continent and achieved a level of general material well-being and 
cultural sophistication that rivaled and surpassed many of the great 
empires in world history. 

Paradoxically, Peruvian history is also unique in another, less 
glorious, way. The Andean peoples engaged the invading Spaniards 
in 1532 in one of the first clashes between Western and non-Western 
civilizations in history. The ensuing Spanish conquest and colonial- 
ism rent the rich fabric of Andean society and created the enor- 
mous gulf between victors and vanquished that has characterized 
Peru down through the centuries. Indeed, Peru's postconquest, 
colonial past established a historic division — a unique Andean 
"dualism" — that formed the hallmark of its subsequent under- 
development. Peru, like its geography, became divided economi- 
cally, socially, and politically between a semifeudal, largely native 
American highland interior and a more modernized, capitalistic, 
urbanized, and mestizo (see Glossary) coast. At the apex of its so- 
cial structure, a small, wealthy, educated elite came to dominate 
the vast majority of Peruvians, who, by contrast, subsisted in 
poverty, isolation, ignorance, and disease. The persistence of this 
dualism and the inability of the Peruvian state in more recent times 
to overcome it have prevented not only the development but also 
the effective integration and consolidation of the Peruvian nation 
to this day. 

Another unique feature of Peru is the role that outsiders have 
played in its history. Peru's formal independence from Spain in 
1824 (proclaimed on July 28, 1821) was largely the work of "out- 
siders," such as the Venezuelan Simon Bolivar Palacios and the 
Argentine Jose de San Martin. In 1879 Chile invaded Peru, 
precipitating the War of the Pacific (1879-83), and destroyed or 
carried off much of its wealth, as well as annexing a portion of its 
territory. Foreigners have also exploited Peru's natural resources, 
from silver in the colonial period to guano and nitrates in the 



3 



Peru: A Country Study 



nineteenth century and copper, oil, and various industrial metals 
in the twentieth century. This exploitation, among other things, 
led advocates of the dependency theory to argue that Peru's export- 
dependent economy was created and manipulated by foreign in- 
terests in a nefarious alliance with a domestic oligarchy. 

Although foreigners have played controversial roles throughout 
Peruvian history, internal demographic changes since the middle 
of the twentieth century have shaped contemporary Peru in other 
fundamental ways. For example, the total population grew almost 
threefold from over 7 million in 1950 to nearly 20 million in 1985, 
despite slowing down in the 1970s. This growth reflected a sharp 
jump after World War II in fertility rates that led to an average 
annual increase in the population of 2.5 percent. At the same time, 
a great wave of out-migration swept the Sierra. Over the next quar- 
ter century, Peru moved from a rural to an essentially urban soci- 
ety. In 1980 over 60 percent of its work force was located in towns 
and cities. The capital, Lima, had one-third of the total popula- 
tion, and the coast had three-fifths. This monumental population 
shift resulted in a dramatic increase in the informal economy (see 
Glossary) because Peru's formal economy was unable to expand 
fast enough to accommodate the newcomers. In 1985 half of Lima's 
nearly 7 million inhabitants lived in informal housing, and at least 
half of the country's population was employed or underemployed 
in the informal sector. 

The demographic changes during the previous quarter century 
led anthropologist Jose Matos Mar to describe the 1980s as a great 
desborde popular (overflowing of the masses). Once the proud bas- 
tion of the dominant Creole (white American-born) classes, Lima 
became increasingly Andeanized in ways that have made it virtu- 
ally unrecognizable to a previous generation of inhabitants. In some 
ways, this trend of Andeanization suggests that the old dualism 
may now be beginning to erode, at least in an ethnic sense. Urban- 
ization and desborde popular also tended to overwhelm the capacity 
of the state, already weak by historical standards, to deliver even 
the basic minimum of governmental services to the vast majority 
of the population. 

As these demographic changes unfolded, Peru experienced an 
increasing "hegemonic" crisis — the dispersion of power away from 
the traditional triumvirate of oligarchy, church, and armed forces. 
This dispersion occurred when the longstanding power of the oligar- 
chy came to an abrupt end in the 1968 military "revolution." The 
ensuing agrarian reform of 1969 destroyed the economic base of 
both the export elite and the gamonales (sing, gamonal; rural bosses — 
see Glossary) in the Sierra. Then, after more than a decade, the 



4 



Historical Setting 



military, in growing public disfavor, returned to the barracks, open- 
ing the way, once again, to the democratic process. 

With the resumption of elections in 1980, a process that was 
reaffirmed in 1985 (and again in 1990), "redemocratization" con- 
fronted a number of problems. The end of military rule left in its 
wake an enormous political vacuum that the political parties — 
absent for twelve years and historically weak — and a proliferating 
number of new groups were hard-pressed to fill. Even under the 
best of circumstances, given Peru's highly fragmented and heter- 
ogeneous society, as well as its long history of authoritarian and 
oligarchical rule, effective democratic government would have been 
difficult to accomplish. Even more serious, redemocratization faced 
an increasingly grave threat from a deepening economic crisis that 
began in the mid-1960s. Various economic factors caused the coun- 
try's main engine for sustained economic growth to stall. As a result 
of the ensuing economic stagnation and decline, real wages by 1985 
approached mid- 1960 levels. 

Finally, redemocratization was also threatened from another 
quarter — the emergence, also in 1980, of the Shining Path (Sendero 
Luminoso — SL) guerrilla movement, Latin America's most vio- 
lent and radical ongoing insurgency. By 1985 its "people's war" 
had claimed about 6,000 victims, most of them innocent civilians 
killed by the guerrillas or the army. Resorting to extraordinarily 
violent means, the SL succeeded in challenging the authority of 
the state, particularly in the more remote areas of the interior, where 
the presence of the state had always been tenuous — the more so 
now because of the absence of the gamonal class. Violence, however, 
was a thread that ran throughout Andean history, from Inca ex- 
pansion, the Spanish conquest and colonialism, and countless na- 
tive American insurrections and their suppression to the struggle 
for independence in the 1820s, the War of the Pacific, and the long- 
term nature of underdevelopment itself. 

Andean Societies Before the Conquest 

Pre-lnca Cultures 

The first great conquest of Andean space began some 20,000 
years ago when the descendants of the original migrants who crossed 
the land bridge over what is now the Bering Straits between the 
Asian and American continents reached northern South America. 
Over the next several millennia, hunter- gatherers fanned out from 
their bridgehead at Panama to populate the whole of South Amer- 
ica. By about 2500 B.C., small villages inhabited by farmers and 
fishermen began to spring up in the fertile river valleys of the north 
coast of Peru. 



5 



Peru: A Country Study 

These ancient Peruvians lived in simple adobe houses, cultivated 
potatoes and beans, fished in the nearby sea, and grew and wove 
cotton for their clothing. The catalyst for the development of the 
more advanced civilizations that followed was the introduction of 
a staple annual crop — maize (corn) — and the development of irri- 
gation, both dating from around the thirteenth century B.C. The 
stabilization of the food supply and ensuing surplus formed the foun- 
dation for the development of the great civilizations that rose and 
fell across the Andes for more than a thousand years prior to the 
arrival of the Europeans. 

The Incas, of course, were only the most recent of these highly 
developed native American cultures to evolve in the Andes. The 
earliest central state to emerge in the northern highlands (that is, 
a state able to control both highland and coastal areas) was the King- 
dom of Chavin, which emerged in the northern highlands and 
prospered for some 500 years between 950 B.C. and 450 B.C. 
Although it was originally thought by Julio C. Tello, the father 
of Peruvian archaeology, to have been "the womb of Andean civili- 
zation," it now appears to have had Amazonian roots that may 
have led back to Mesoamerica. 

Chavin was probably more of a religious than political pan- 
Andean phenomenon. It seems to have been a center for the mis- 
sionary diffusion of priests who transmitted a particular set of ideas, 
rituals, and art style throughout what is now north-central Peru. 
The apparent headquarters for this religious cult in all likelihood 
was Chavin de Huantar in the Ancash highlands, whose elaborately 
carved stone masonry buildings are among the oldest and most 
beautiful in South America. The great, massive temple there, 
oriented to the cardinal points of the compass, was perceived by 
the people of Chavin to be the center of the world, the most holy 
and revered place of the Chavin culture. This concept of God and 
his elite tied to a geographical location at the center of the cosmos — 
the idea of spatial mysticism — was fundamental to Inca and pre- 
Inca beliefs. 

After the decline of the Chavin culture around the beginning 
of the Christian millennium, a series of localized and specialized 
cultures rose and fell, both on the coast and in the highlands, during 
the next thousand years. On the coast, these included the Gallinazo, 
Mochica, Paracas, Nazca, and Chimu civilizations. Although each 
had their salient features, the Mochica and Chimu warrant spe- 
cial comment for their notable achievements. 

The Mochica civilization occupied a 136-kilometer-long expanse 
of the coast from the Rio Moche Valley and reached its apogee 
toward the end of the first millennium A.D. The Mochica built 



6 



an impressive irrigation system that transformed kilometers of bar- 
ren desert into fertile and abundant fields capable of sustaining a 
population of over 50,000. Without benefit of the wheel, the plough, 
or a developed writing system, the Mochica nevertheless achieved 
a remarkable level of civilization, as witnessed by their highly 
sophisticated ceramic pottery, lofty pyramids, and clever metal- 
work. In 1987 near Sipan, archaeologists unearthed an extraordi- 
nary cache of Mochica artifacts from the tomb of a great Mochica 
lord, including finely crafted gold and silver ornaments, large, gilded 
copper figurines, and wonderfully decorated ceramic pottery. In- 
deed, the Mochica artisans portrayed such a realistic and accurately 
detailed depiction of themselves and their environment that we have 
a remarkably authentic picture of their everyday life and work. 

Whereas the Mochica were renowned for their realistic ceramic 
pottery, the Chimu were the great city-builders of pre-Inca civili- 
zation. Living in a loose confederation of cities scattered along the 
coast of northern Peru and southern Ecuador, the Chimu flourished 
from about 1 150 to 1450. Their capital was at Chan Chan outside 
of modern-day Trujillo. The largest pre-Hispanic city in South 
America at the time, Chan Chan had 100,000 inhabitants. Its 
twenty square kilometers of precisely symmetrical design was sur- 
rounded by a lush garden oasis intricately irrigated from the Rio 
Moche several kilometers away. The Chimu civilization lasted a 
comparatively short period of time, however. Like other coastal 



7 



Peru: A Country Study 



states, its irrigation system, watered from sources in the high Ancles, 
was apparently vulnerable to cutoff or diversion by expanding high- 
land polities. 

In the highlands, both the Tiwanaku (Tiahuanaco) culture, near 
Lake Titicaca in Bolivia, and the Wari (Huari) culture, near the 
present-day city of Ayacucho, developed large urban settlements 
and wide-ranging state systems between A.D. 500 and A.D. 1000. 
Each exhibited many of the aspects of the engineering ingenuity 
that later appeared with the Incas, such as extensive road systems, 
store houses, and architectural styles. Between A.D. 1000 and 1450, 
however, a period of fragmentation shattered the previous unity 
achieved by the Tiwanaku-Wari stage. During this period, scores 
of different ethnic-based groups of varying sizes dotted the Andean 
landscape. In the central and southern Andes, for example, the 
Chupachos of Huanuco numbered some 10,000, and the Lupacas 
on the west bank of Lake Titicaca comprised over 100,000. 

The Incas 

The Incas of Cusco (Cuzco) originally represented one of these 
small and relatively minor ethnic groups, the Quechuas. Gradu- 
ally, as early as the thirteenth century, they began to expand and 
incorporate their neighbors. Inca expansion was slow until about 
the middle of the fifteenth century, when the pace of conquest began 
to accelerate, particularly under the rule of the great emperor 
Pachacuti Inca Yupanqui (1438-71). Historian John Hemming 
describes Pachacuti as "one of those protean figures, like Alexander 
or Napoleon, who combine a mania for conquest with the ability 
to impose his will on every facet of government." Under his rule 
and that of his son, Topa Inca Yupanqui (1471-93), the Incas came 
to control upwards of a third of South America, with a population 
of 9 to 16 million inhabitants under their rule. Pachacuti also 
promulgated a comprehensive code of laws to govern his far-flung 
empire, called Tawantinsuyu, while consolidating his absolute tem- 
poral and spiritual authority as the God of the Sun who ruled from 
a magnificently rebuilt Cusco. 

Although displaying distinctly hierarchical and despotic features, 
Incan rule also exhibited an unusual measure of flexibility and pater- 
nalism. The basic local unit of society was the ayllu (see Glossary), 
which formed an endogamous nucleus of kinship groups who pos- 
sessed collectively a specific, although often disconnected, territory. 
In the ayllu, grazing land was held in common (private property 
did not exist), whereas arable land was parceled out to families in 
proportion to their size. Because self-sufficiency was the ideal of 
Andean society, family units claimed parcels of land in different 



8 



Historical Setting 



ecological niches in the rugged Andean terrain. In this way, they 
achieved what anthropologists have called "vertical complemen- 
tarity," that is, the ability to produce a wide variety of crops — 
such as maize, potatoes, and quinoa (a protein-rich grain) — at 
different altitudes for household consumption. 

The principle of complementarity also applied to Andean social 
relations, as each family head had the right to ask relations, allies, 
or neighbors for help in cultivating his plot. In return, he was ob- 
ligated to offer them food and chicha (a fermented corn alcoholic 
beverage), and to help them on their own plots when asked. Mutual 
aid formed the ideological and material bedrock of all Andean so- 
cial and productive relations. This system of reciprocal exchange 
existed at every level of Andean social organization: members of 
the ayllus, curacas (local lords) with their subordinate ayllus, and the 
Inca himself with all his subjects. 

Ayllus often formed parts of larger dual organizations with upper 
and lower divisions called moieties, and then still larger units, until 
they comprised the entire ethnic group. As it expanded, the Inca 
state became, historian Nathan Wachtel writes, "the pinnacle of 
this immense structure of interlocking units. It imposed a political 
and military apparatus on all of these ethnic groups, while con- 
tinuing to rely on the hierarchy of curacas, who declared their loyalty 
to the Inca and ruled in his name." In this sense, the Incas estab- 
lished a system of indirect rule that enabled the incorporated eth- 
nic groups to maintain their distinctiveness and self-awareness 
within a larger imperial system. 

All Inca people collectively worked the lands of the Inca, who 
served as representative of the God of the Sun — the central god 
and religion of the empire. In return, they received food, as well 
as chicha and coca leaves (which were chewed and used for reli- 
gious rites and for medicinal purposes); or they made cloth and 
clothing for tribute, using the Inca flocks; or they regularly per- 
formed mita (see Glossary), or service for public works, such as roads 
and buildings, or for military purposes that enabled the develop- 
ment of the state. The Inca people also maintained the royal family 
and bureaucracy, centered in Cusco. In return for these services, 
the Inca allocated land and redistributed part of the tribute 
received — such as food, cloth, and clothes — to the communities, 
often in the form of welfare. Tribute was stored in centrally lo- 
cated warehouses to be dispensed during periods of shortages caused 
by famine, war, or natural disaster. In the absence of a market 
economy, Inca redistribution of tribute served as the primary means 
of exchange. The principles of reciprocity and redistribution, then, 



9 



Peru: A Country Study 

formed the organizing ideas that governed all relations in the Inca 
empire from community to state. 

One of the more remarkable elements of the Inca empire was 
the mitmaq system. Before the Incas conquered the area, colonies 
of settlers were sent out from the ayllus to climatically different 
Andean terrains to cultivate crops that would vary and enrich the 
community diet. Anthropologist John V. Murra dubbed these 
unique Andean island colonies ''vertical archipelagos," which the 
Incas adapted and applied on a large scale to carve out vast new 
areas of cultivation. The Incas also expanded the original Andean 
concept of mitmaq as a vehicle for developing complementary sources 
of food to craft specialization and military expansion. In the latter 
instance, Inca mitmaq were used to establish permanent garrisons 
to maintain control and order on the expanding Inca frontier. What 
"began as a means of complementing productive access to a vari- 
ety of ecological tiers had become," in the words of Murra, "an 
onerous means of political control" under the Incas. 

By the late fifteenth century and early sixteenth century, the Inca 
Empire had reached its maximum size. Such powerful states as 
the coastal Chimu Kingdom were defeated and incorporated into 
the empire, although the Chimus spoke a language, Yunga, that 
was entirely distinct from the Incas' Quechua. But as the limits 
of the central Andean culture area were reached in present-day Chile 
and Argentina, as well as in the Amazon forests, the Incas encoun- 
tered serious resistance, and those territories were never thoroughly 
subjugated. 

At the outset, the Incas shared with most of their ethnic neigh- 
bors the same basic technology: weaving, pottery, metallurgy, ar- 
chitecture, construction engineering, and irrigation agriculture. 
During their period of dominance, little was added to this inven- 
tory of skills, other than the size of the population they ruled and 
the degree and efficiency of control they attained. The latter, 
however, constituted a rather remarkable accomplishment, par- 
ticularly because it was achieved without benefit of either the wheel 
or a formal system of writing. Instead of writing, the Incas used 
the intricate and highly accurate quipu (knot-tying) system of 
record-keeping. Imperial achievements were the more extraordi- 
nary considering the relative brevity of the period during which 
the empire was built (perhaps four generations) and the formid- 
able geographic obstacles of the Andean landscape. 

Viewed from the present-day perspective of Peruvian under- 
development, one cannot help but admire a system that managed 
to bring under cultivation four times the amount of arable land 



10 



Machupicchu — Incas' "lost city" discovered by American 
historian Hiram Bingham, 1911 
Courtesy Inter-American Development Bank 



11 



Peru: A Country Study 

cultivated today. Achievements such as these caused some twentieth- 
century Peruvian scholars of the indigenous peoples, known as 
indigenistas (indigenists), such as Hildebrando Castro Pozo and Luis 
Eduardo Valcarcel, to idealize the Inca past and to overlook the 
hierarchical nature and totalitarian mechanisms of social and po- 
litical control erected during their Incan heyday. To other intellec- 
tuals, however, from Jose Carlos Mariategui to Luis Guillermo 
Lumbreras, the path to development has continued to call for some 
sort of return to the country's pre-Columbian past of communal 
values, autochthonous technology, and genius for production and 
organization. 

By the time that the Spaniards arrived in 1532, the empire ex- 
tended some 1,860 kilometers along the Andean spine — north to 
southern Colombia and south to northern Chile, between the Pa- 
cific Ocean in the west and the Amazonian rain forest in the east. 
Some five years before the Spanish invasion, this vast empire was 
rocked by a civil war that, combined with diseases imported by 
the Spaniards, would ultimately weaken its ability to confront the 
European invaders. The premature death by measles of the reign- 
ing Sapa Inca, Huayna Capac (1493-1524), opened the way for 
a dynastic struggle between the emperor's two sons, Huascar (from 
Cusco) and the illegitimate Atahualpa (from Quito), who each had 
inherited half the empire. After a five-year civil war (1528-32), 
Atahualpa (1532-33) emerged victorious and is said to have tor- 
tured and put to death more than 300 members of Huascar' s fam- 
ily. This divisive and debilitating internecine conflict left the Incas 
particularly vulnerable just as Francisco Pizarro and his small force 
of adventurers came marching up into the Sierra. 

The Spanish Conquest, 1532-72 
Pizarro and the Conquistadors 

While the Inca empire flourished, Spain was beginning to rise 
to prominence in the Western world. The political union of the 
several independent realms in the Iberian Peninsula and the final 
expulsion of the Moors after 700 years of intermittent warfare had 
instilled in Spaniards a sense of destiny and a militant religious 
zeal. The encounter with the New World by Cristobal Colon 
(Christopher Columbus) in 1492 offered an outlet for the mate- 
rial, military, and religious ambitions of the newly united nation. 

Francisco Pizarro, a hollow-cheeked, thinly bearded Extremaduran 
of modest hidalgo (lesser nobility) birth, was not only typical of 
the arriviste Spanish conquistadors who came to America, but also 
one of the most spectacularly successful. Having participated in 



12 



Historical Setting 



the indigenous wars and slave raids on Hispaniola, Spain's first 
outpost in the New World, the tough, shrewd, and audacious 
Spaniard was with Vasco Nunez de Balboa when he first glimpsed 
the Pacific Ocean in 1513 and was a leader in the conquest of 
Nicaragua (1522). He later found his way to Panama, where he 
became a wealthy encomendero (see Glossary) and leading citizen. 
Beginning in 1524, Pizarro proceeded to mount several expedi- 
tions, financed mainly from his own capital, from Panama south 
along the west coast of South America. 

After several failures, Pizarro arrived in northern Peru late in 
1532 with a small force of about 180 men and 30 horses. The con- 
quistadors were excited by tales of the Incas' great wealth and bent 
on repeating the pattern of conquest and plunder that was becom- 
ing practically routine elsewhere in the New World. The Incas never 
seemed to appreciate the threat they faced. To them, of course, 
the Spaniards seemed the exotics. "To our Indian eyes," wrote 
Felipe Guaman Poma de Ayala, the author of Nueva cronicay buen 
gobierno (New Chronicle and Good Government), "the Spaniards 
looked as if they were shrouded like corpses. Their faces were cov- 
ered with wool, leaving only the eyes visible, and the caps which 
they wore resembled little red pots on top of their heads." 

On November 15, 1532, Pizarro arrived in Cajamarca, the Inca's 
summer residence located in the Andean highlands of northern 
Peru, and insisted on an audience with Atahualpa. Guaman Poma 
says the Spaniards demanded that the Inca renounce his gods and 
accept a treaty with Spain. He refused. "The Spaniards began to 
fire their muskets and charged upon the Indians, killing them like 
ants. At the sound of the explosions and the jingle of bells on the 
horses' harnesses, the shock of arms and the whole amazing novelty 
of their attackers' appearance, the Indians were terror-stricken. 
They were desperate to escape from being trampled by the horses, 
and in their headlong flight a lot of them were crushed to death." 
Guaman Poma adds that countless "Indians" but only five 
Spaniards were killed, "and these few casualties were not caused 
by the Indians, who had at no time dared to attack the formidable 
strangers." According to other accounts, the only Spanish casualty 
was Pizarro, who received a hand wound while trying to protect 
Atahualpa. 

Pizarro 's overwhelming victory at Cajamarca in which he not 
only captured Atahualpa, but devastated the Inca's army, estimated 
at between 5,000 and 6,000 warriors, dealt a paralyzing and 
demoralizing blow to the empire, already weakened by civil war. 
The superior military technology of the Spaniards — cavalry, can- 
non, and above all Toledo steel — had proved unbeatable against 



13 



Peru: A Country Study 

a force, however large, armed only with stone-age battle axes, slings, 
and cotton-padded armor. Atahualpa's capture not only deprived 
the empire of leadership at a crucial moment, but the hopes of his 
recently defeated opponents, the supporters of Huascar, were re- 
vived by the prospect of an alliance with a powerful new Andean 
power contender, the Spaniards. 

Atahualpa now sought to gain his freedom by offering the 
Spaniards a treasure in gold and silver. Over the next few months, 
a fabulous cache of Incan treasure — some eleven tons of gold ob- 
jects alone — was delivered to Cajamarca from all corners of the 
empire. Pizarro distributed the loot to his "men of Cajamarca," 
creating instant "millionaires," but also slighting Diego de 
Almagro, his partner who arrived later with reinforcements. This 
action sowed the seeds for a bitter factional dispute that soon would 
throw Peru into a bloody civil war and cost both men their lives. 
Once enriched by the Incas' gold, Pizarro, seeing no further use 
for Atahualpa, reneged on his agreement and executed the Inca — by 
garroting rather than hanging — after Atahualpa agreed to be bap- 
tized as a Christian. 

Consolidation of Control 

With Atahualpa dead, the Spaniards proceeded to march on 
Cusco. On the way, they dealt another decisive blow, aided by na- 
tive American allies from the pro-Huascar faction, to the still for- 
midable remnants of Atahualpa's army. Then on November 15, 
1533, exactly a year after arriving at Cajamarca, Pizarro, rein- 
forced with an army of 5,000 native American auxiliaries, captured 
the imperial city and placed Manco Capac II, kin of Huascar and 
his faction, on the Inca throne as a Spanish puppet. 

Further consolidation of Spanish power in Peru, however, was 
slowed during the next few years by both indigenous resistance and 
internal divisions among the victorious Spaniards. The native popu- 
lation, even those who had allied initially with the invaders against 
the Incas, had second thoughts about the arrival of the newcomers. 
They originally believed that the Spaniards simply represented one 
more in a long line of Andean power-contenders with whom to ally 
or accommodate. The continuing violent and rapacious behavior 
of many Spaniards, however, as well as the harsh overall effects 
of the new colonial order, caused many to alter this assessment. 
This change led Manco Capac II to balk at his subservient role 
as a Spanish puppet and to rise in rebellion in 1536. Ultimately 
unable to defeat the Spaniards, Manco retreated to Vilcabamba 
in the remote Andean interior where he established an independent 



14 



Quechuan boy at Incan wall in Cusco 
Courtesy Inter -American Development Bank 

Inca kingdom, replete with a miniature royal court, that held out 
until 1572. 

Native American resistance took another form during the 1560s 
with the millenarian religious revival in Huamanga known as Taki 
Onqoy (literally "dancing sickness"), which preached the total re- 
jection of Spanish religion and customs. Converts to the sect ex- 
pressed their conversion and spiritual rebirth by a sudden seizure 
in which they would shake and dance uncontrollably, often falling 
and writhing on the ground. The leaders of Taki Onqoy claimed 
that they were messengers from the native gods and preached that 
a pan-Andean alliance of native gods would destroy the Chris- 
tians by unleashing disease and other calamities against them. An 
adherent to the sect declared at an official inquiry in 1564 that "the 
world has turned about, and this time God and the Spaniards [will 
be] defeated and all the Spaniards killed and their cities drowned; 
and the sea will rise and overwhelm them, so that there will re- 
main no memory of them." 

To further complicate matters for the conquerors, a fierce dis- 
pute broke out among the followers of Pizarro and those of Diego 
de Almagro. Having fallen out over the original division of spoils 
at Cajamarca, Almagro and his followers challenged Pizarro 's con- 
trol of Cusco after returning from an abortive conquest expedition 



15 



Peru: A Country Study 



to Chile in 1537. Captured by Pizarro's forces at the Battle of Salinas 
in 1538, Almagro was executed, but his supporters, who continued 
to plot under his son, Diego, gained a measure of revenge by as- 
sassinating Pizarro in 1541. 

As the civil turmoil continued, the Spanish crown intervened to 
try to bring the dispute to an end, but in the process touched off 
a dangerous revolt among the colonists by decreeing the end of the 
encomienda system (see Glossary) in 1542. The encomienda had origi- 
nally been granted as a reward to the conquistadors and their fami- 
lies during the conquest and ensuing colonization, and was regarded 
as sacrosanct by the grantees, or encomenderos, who numbered about 
500 out of a total Spanish population of 2,000 in 1536. However, 
to the crown it raised the specter of a potentially privileged, neofeudal 
elite emerging in the Andes to challenge crown authority. 

The crown's efforts to enforce the New Laws (Nuevos Leyes) 
of 1542 alienated the colonists, who rallied around the figure of 
Gonzalo Pizarro, the late Francisco's brother. Gonzalo managed 
to kill the intemperate Viceroy Don Blasco Nunez de la Vela, who, 
on his arrival, had foolishly tried to enforce the New Laws. In 1544 
Pizarro assumed de facto authority over Peru. His arbitrary and 
brutal rule, however, caused opposition among the colonists, so 
that when another royal representative, Pedro de la Gasca, arrived 
in Peru to restore crown authority, he succeeded in organizing a 
pro-royalist force that defeated and executed Pizarro in 1548. With 
Gonzalo 's death, the crown finally succeeded, despite subsequent 
intermittent revolts, in ending the civil war and exerting crown 
control over Spanish Peru. 

It would take another two decades, however, to finally quell na- 
tive American resistance. Sensing the danger of the Taki Onqoy 
heresy, the Spanish authorities moved quickly and energetically, 
through a church- sponsored anti-idolatry campaign, to suppress 
it before it had a chance to spread. Its leaders were seized, beaten, 
fined, or expelled from their communities. At the same time, a 
new campaign was mounted against the last Inca holdout at Vilca- 
bamba, which was finally captured in 1572. With it, the last reigning 
Inca, Tupac Amaru, was tried and beheaded by the Spaniards in 
a public ceremony in Cusco, thereby putting an end to the events 
of the conquest that had begun so dramatically four decades earlier 
at Cajamarca. 

The Colonial Period, 1550-1824 

Demographic Collapse 

Throughout the Americas, the impact of the Spanish conquest 
and subsequent colonization was to bring about a cataclysmic 



16 



Historical Setting 



demographic collapse of the indigenous population. The Andes 
would be no exception. Even before the appearance of Francisco 
Pizarro on the Peruvian coast, the lethal diseases that had been 
introduced into the Americas with the arrival of the Spaniards — 
smallpox, malaria, measles, typhus, influenza, and even the com- 
mon cold — had spread to South America and begun to wreak havoc 
throughout Tawantinsuyu. Indeed, the death of Huayna Capac and 
his legitimate son and heir, Ninan Cuyoche, which touched off the 
disastrous dynastic struggles between Huascar and Atahualpa, is 
believed to have been the result of a smallpox or measles epidemic 
that struck in 1530-31. 

With an estimated population of 9 to 16 million people prior to 
the arrival of the Europeans, Peru's population forty years later 
was reduced on average by about 80 percent, generally higher on 
the coast than in the highlands (see table 2, Appendix). The chroni- 
cler Pedro de Cieza de Leon, who traveled over much of Peru dur- 
ing this period, was particularly struck by the extent of the 
depopulation along the coast. "The inhabitants of this valley 
[Chincha, south of Lima]," he wrote, "were so numerous that 
many Spaniards say that when it was conquered by the Marquis 
[Pizarro] and themselves, there were . . . more than 25,000 men, 
and I doubt that there are now 5,000, so many have been the in- 
roads and hardships they have suffered." Demographic anthro- 
pologists Henry F. Dobyns and Paul L. Doughty have estimated 
that the native American population fell to about 8.3 million by 
1548 and to around 2.7 million in 1570. Unlike Mexico, where 
the population stabilized at the end of the seventeenth century, the 
population in Peru did not reach its lowest point until the latter 
part of the eighteenth century, after the great epidemic of 1719. 

War, exploitation, socioeconomic change, and the generalized 
psychological trauma of conquest all combined to reinforce the main 
contributor to the demise of the native peoples — epidemic disease. 
Isolated from the Old World for millennia and therefore lacking 
immunities, the Andean peoples were defenseless against the deadly 
diseases introduced by the Europeans. Numerous killer pandemics 
swept down from the north, laying waste to entire communities. 
Occurring one after the other in roughly ten-year intervals during 
the sixteenth century (1525, 1546, 1558-59, 1585), these epidem- 
ics did not allow the population time to recover and impaired its 
ability to reproduce itself. 

The Colonial Economy 

With the discovery of the great silver lodes at Potosi in Peru 
Alto (Upper Peru — present-day Bolivia) in 1545 and mercury at 



17 



Peru: A Country Study 

Huancavelica in 1563, Peru became what historian Fredrick B. 
Pike describes as "Spain's great treasure house in South Amer- 
ica." As a result, the axis of the colonial economy began to move 
away from the direct expropriation of Incan wealth and produc- 
tion and an attempt to sustain the initial Spanish population through 
the encomienda system to the extraction of mineral wealth. The popu- 
lation at Potosi in the high Andes reached about 160,000, its peak, 
in 1650, making it one of the largest cities in the Western world 
at the time. In its first ten years, according to Alexander von Hum- 
boldt, Potosi produced some 127 million pesos, which fueled for 
a time the Habsburg war machine and Spanish hegemonic politi- 
cal pretensions in Europe. Silver from Potosi also dynamized and 
helped to develop an internal economy of production and exchange 
that encompassed not only the northern highlands, but also the 
Argentine pampa, the Central Valley of Chile, and coastal Peru 
and Ecuador. The main "growth pole" of this vast "economic 
space," as historian Carlos Assadourian Sempat calls it, was the 
Lima-Potosi axis, which served as centers of urban concentration, 
market demand, strategic commodity flows (silver exports and 
European imports), and inflated prices. 

If Potosi silver production was the mainspring of this economic 
system, Lima was its hub. "The city of the kings" (Los Reyes) 
had been founded by Pizarro as the capital of the new viceroyalty 
in 1535 in order to reorient trade, commerce, and power away from 
the Andes toward imperial Spain and Europe. As the outlet for 
silver bullion on the Pacific, Lima and its nearby port, Callao, also 
received and redistributed the manufactured goods from the 
metropolis for the growing settlements along the growth pole. The 
two-way flow of imports and exports through Lima concentrated 
both wealth and administration, public and private, in the city. 
As a result, Lima became the headquarters for estate owners and 
operators, merchants connecting their Andean trading operations 
with sources of supply in Spain, and all types of service providers, 
from artisans to lawyers, who needed access to the system in a cen- 
tral place. Not far behind came the governmental and church or- 
ganizations established to administer the vast viceroyalty. Finally, 
once population, commerce, and administration interacted, major 
cultural institutions such as a university, a printing press, and the- 
ater followed suit. 

The great architect of this colonial system was Francisco Toledo 
y Figueroa, who arrived in Lima in 1569, when its population was 
2,500, and served as viceroy until 1581 (see table 3, Appendix). 
Toledo, one of Madrid's ablest administrators and diplomats, 
worked to expand the state, increase silver production, and generally 



18 




Woodcut of PotosVs Cerro Rico by Agustin de Zdrate, 1555 

reorganize the economy by instituting a series of major reforms 
during his tenure. 

Native communities {ayllus) were concentrated into poorly lo- 
cated colonial settlements called reducciones (see Glossary) to facili- 
tate administration and the conversion of the native Americans to 
Christianity. The Incan mita system was shifted from performing 
public works or military service to supplying compulsory labor for 
the mines and other key sectors of the economy and state. Finally, 
various fiscal schemes, such as the tribute tax to be paid in coin 
and the forced purchase of Spanish merchandise, were levied on 
the indigenous population in order to force or otherwise induce 
it into the new monetary economy as "free wage" workers. In these, 
as in many other instances, the Spaniards used whatever elements 
of the Andean political, social, and economic superstructure that 
served their purposes and unhesitatingly modified or discarded those 
that did not. 

As a result of these and other changes, the Spaniards and their 
Creole successors came to monopolize control over the land, seiz- 
ing many of the best lands abandoned by the massive native depopu- 
lation. Gradually, the land tenure system became polarized. One 
sector consisted of the large haciendas, worked by native peasant 



19 



Peru: A Country Study 

serfs in a variety of labor arrangements and governed by their new 
overlords according to hybrid Andean forms of Iberian paternal- 
ism. The other sector was made up of remnants of the essentially 
subsistence-based indigenous communities that persisted and en- 
dured. This arrangement left Peru with a legacy of one of the most 
unequal landholding arrangements in all of Latin America and a 
formidable obstacle to later development and modernization. 

Colonial Administration 

The expansion of a colonial administrative apparatus and 
bureaucracy paralleled the economic reorganization. The vice- 
royalty was divided into audiences (audiencias — see Glossary), which 
were further subdivided into provinces or districts (corregimientos — see 
Glossary) and finally municipalities. The latter included a city or 
town, which was governed by a town council (cabildo — see Glos- 
sary) composed of the most prominent citizens, mostly encomenderos 
in the early years and later hacendados (see Glossary). 

The most important royal official was the viceroy, who had a 
host of responsibilities ranging from general administration (par- 
ticularly tax collection and construction of public works) and in- 
ternal and external defense to support of the church and protection 
of the native population. He was surrounded by a number of other 
judicial, ecclesiastical, and treasury officials, who also reported to 
the Council of the Indies, the main governing body located in Spain. 
This configuration of royal officials, along with an official review 
of his tenure called the residencia (see Glossary), served as a check 
on viceregal power. 

In the early years of the conquest, the crown was particularly 
concerned with preventing the conquistadors and other encomen- 
deros from establishing themselves as a feudal aristocracy capable 
of thwarting royal interests. Therefore, it moved quickly to quell 
the civil disturbances that had racked Peru immediately after the 
conquest and to decree the New Laws of 1542, which deprived the 
encomenderos and their heirs of their rights to native American goods 
and services. 

The early administrative functions of the encomenderos over the 
indigenous population (protection and Christianization) were taken 
over by new state-appointed officials called corregidores de indios 
(governors of Indians — see Glossary). They were charged at the 
provincial level with the administration of justice, control of com- 
mercial relations between native Americans and Spaniards, and 
the collection of the tribute tax. The corregidores (Spanish magis- 
trates) were assisted by curacas, members of the native elite, who 
had been used by the conquerors from the very beginning as 



20 



Historical Setting 



mediators between the native population and the Europeans. Over 
time the corregidores used their office to accumulate wealth and power. 
They also dominated rural society by establishing mutual alliances 
with local and regional elites such as the curacas, native American 
functionaries, municipal officials, rural priests {doctrineros) , land- 
owners, merchants, miners, and others, as well as native and 
mestizo subordinates. 

As the crown's political authority was consolidated in the second 
half of the sixteenth century, so too was its ability to regulate and 
control the colonial economy. Operating according to the mercan- 
tilistic strictures of the times, the crown sought to maximize in- 
vestment in valuable export production, such as silver and later 
other mineral and agricultural commodities, while supplying the 
new colonial market with manufactured imports, so as to create 
a favorable balance of trade for the metropolis. However, the tightly 
regulated trading monopoly, headquartered in Seville, was not al- 
ways able to provision the colonies effectively. Assadourian shows 
that most urban and mining demand, particularly among the labor- 
ing population, was met by internal Andean production (rough- 
hewn clothing, foodstuffs, yerba mate tea, chicha beer, and the like) 
from haciendas, indigenous communities, and textile factories 
(pbrajes — see Glossary). According to him, the value of these An- 
dean products amounted to fully 60 to 70 percent of the value of 
silver exports and elite imports linking Peru and Europe. In any 
case, the crown was successful in managing the colonial export econ- 
omy through the development of a bureaucratic and interventionist 
state, characterized by a plethora of mercantilistic rules that regu- 
lated the conduct of business and commerce. In doing so, Spain 
left both a mercantilist and export-oriented pattern and legacy of 
"development" in the Andes that has survived up to the pres- 
ent day, and which remains a problem of contemporary under- 
development. 

The Colonial Church 

The crown, as elsewhere in the Americas, worked to solidify the 
Andean colonial order in tandem with the church to which it was 
tied by royal patronage dating from the late fifteenth century. Hav- 
ing accompanied Francisco Pizarro and his force during the con- 
quest, the Roman Catholic friars proceeded zealously to carry out 
their mission to convert the indigenous peoples to Christianity. In 
this endeavor, the church came to play an important role in the 
acculturation of the natives, drawing them into the cultural orbit 
of the Spanish settlers. It also waged a constant war to extirpate 
native religious beliefs. Such efforts met with only partial success, 



21 



Peru: A Country Study 

as the syncretic nature of Andean Roman Catholicism today at- 
tests. With time, however, the evangelical mission of the church 
gave way to its regular role of ministering to the growing Spanish 
and Creole population. 

By the end of the century, the church was beginning to acquire 
important financial assets, particularly bequests of land and other 
wealth, that would consolidate its position as the most important 
economic power during the colonial period. At the same time, it 
assumed the primary role of educator, welfare provider, and, 
through the institution of the Inquisition, guardian of orthodoxy 
throughout the viceroyalty. Together, the church-state partnership 
served to consolidate and solidify the crown authority in Peru that, 
despite awesome problems of distance, rough terrain, and slow com- 
munications, endured almost three centuries of continuous and rela- 
tively stable rule. 

Silver production, meanwhile, began to enter into a prolonged 
period of decline in the seventeenth century. This decline also slowed 
the important transatiantic trade and diminished the importance 
of Lima as the economic hub of the viceregal economy. Annual 
silver output at Potosf, for example, fell in value from a little over 
7 million pesos in 1600 to almost 4.5 million pesos in 1650 and 
finally to just under 2 million pesos in 1700. Falling silver produc- 
tion, the declining transatlantic trade, and the overall decline of 
Spain itself during the seventeenth century have long been inter- 
preted by historians as causing a prolonged depression both in 
the viceroyalties of Peru and New Spain (see fig. 2). However, 
economic historian Kenneth J. Andrien has challenged this view, 
maintaining that the Peruvian economy, rather than declining, 
underwent a major transition and restructuring. After the decline 
in silver production and the transatlantic trade eroded the export 
economy, they were replaced by more diversified, regionalized, 
and autonomous development of the agricultural and manufacturing 
sectors. Merchants, miners, and producers simply shifted their in- 
vestments and entrepreneurial activities away from mining and the 
transatlantic trade into internal production and import- substituting 
opportunities, a trend already visible on a small scale by the end 
of the previous century. The result was a surprising degree of 
regional diversification that stabilized the viceregal economy dur- 
ing the seventeenth century. 

This economic diversification was marked by the rise and ex- 
pansion of the great estates, or haciendas, that were carved out 
of abandoned native land as a result of the demographic collapse. 
The precipitous decline of the native population was particularly 
severe along the coast and had the effect of opening up the fertile 



22 



Church of San Antonio 
A bad in Cusco 
Courtesy Inter-American 
Development Bank 



n 
U 



5 ™ £ i, j 





bottom lands of the river valleys to Spanish immigrants eager for 
land and farming opportunities. A variety of crops were raised: 
sugar and cotton along the northern coast; wheat and grains in 
the central valleys; and grapes, olives, and sugar along the entire 
coast. The highlands, depending on geographic and climatic con- 
ditions, underwent a similar hacienda expansion and diversifica- 
tion of production. There, coca, potatoes, livestock, and other 
indigenous products were raised in addition to some coastal crops, 
such as sugar and cereals. 

This transition toward internal diversification in the colony also 
included early manufacturing, although not to the extent of agrarian 
production. Textile manufacturing flourished in Cusco, Cajamarca, 
and Quito to meet popular demand for rough-hewn cotton and 
woolen garments. A growing intercolonial trade along the Pacific 
Coast involved the exchange of Peruvian and Mexican silver for 
oriental silks and porcelain. In addition, Arequipa and then Nazca 
and lea became known for the production of fine wines and bran- 
dies. And throughout the viceroyalty, small-scale artisan industries 
supplied a range of lower-cost goods only sporadically available 
from Spain and Europe, which were now mired in the seventeenth- 
century depression. 

If economic regionalization and diversification worked to stabi- 
lize the colonial economy during the seventeenth century, the 
benefits of such a trend did not, as it turned out, accrue to Madrid. 



23 



Peru: A Country Study 

The crown had derived enormous revenues from silver produc- 
tion and the transatlantic trade, which it was able to tax and col- 
lect relatively easily. The decline in silver production caused a 
precipitous fall in crown revenue, particularly in the second half 
of the seventeenth century. For example, revenue remittances to 
Spain dropped from an annual average of almost 1.5 million pesos 
in the 1630s to less than 128,000 pesos by the 1680s. The crown 
tried to restructure the tax system to conform to the new economic 
realities of seventeenth-century colonial production but was rebuffed 
by the recalcitrance of emerging local elites. They tenaciously re- 
sisted any new local levies on their production, while building alli- 
ances of mutual convenience and gain with local crown officials 
to defend their vested interests. 

The situation further deteriorated, from the perspective of Spain, 
when Madrid began in 1633 to sell royal offices to the highest bid- 
der, enabling self-interested Creoles to penetrate and weaken the 
royal bureaucracy. The upshot was not only a sharp decline in vital 
crown revenues from Peru during the century, which further con- 
tributed to the decline of Spain itself, but an increasing loss of royal 
control over local Creole oligarchies throughout the viceroyalty. 
Lamentably, the sale of public offices also had longer-term impli- 
cations. The practice weakened any notion of disinterested public 
service and infused into the political culture the corrosive idea that 
office-holding was an opportunity for selfish, private gain rather 
than for the general public good. 

If the economy of the viceroyalty reached a certain steady state 
during the seventeenth century, its population continued to decline. 
Estimated at around 3 million in 1650, the population of the 
viceroyalty finally reached its nadir at a little over 1 million in- 
habitants in 1798. It rose sharply to almost 2.5 million inhabitants 
by 1825. The 1792 census indicated an ethnic composition of 13 
percent European, 56 percent native American, and 27 percent 
castas (mestizos), the latter category the fastest-growing group be- 
cause of both acculturation and miscegenation between Europeans 
and natives. 

Demographic expansion and the revival of silver production, 
which had fallen sharply at the end of the seventeenth century, 
promoted a period of gradual economic growth from 1730 to 1770. 
The pace of growth then picked up in the last quarter of the eigh- 
teenth century, partly as a result of the so-called Bourbon reforms 
of 1764, named after a branch of the ruling French Bourbon fam- 
ily that ascended to the Spanish throne after the death of the last 
Habsburg in 1700. 



24 



Historical Setting 



In the second half of the eighteenth century, particularly dur- 
ing the reign of Charles III (1759-1788), Spain turned its reform 
efforts to Spanish America in a concerted effort to increase the 
revenue flow from its American empire. The aims of the program 
were to centralize and improve the structure of government, to 
create more efficient economic and financial machinery, and to de- 
fend the empire from foreign powers. For Peru, perhaps the most 
far-reaching change was the creation in 1776 of a new viceroyalty 
in the Rio de la Plata (River Plate) region that radically altered 
the geopolitical and economic balance in South America. Upper 
Peru was detached administratively from the old Viceroyalty of 
Peru, so that profits from Potosf no longer flowed to Lima and 
Lower Peru, but to Buenos Aires. With the rupture of the old Lima- 
Potosi circuit, Lima suffered an inevitable decline in prosperity and 
prestige, as did the southern highlands (Cusco, Arequipa, and 
Puno). The viceregal capital's status declined further from the 
general measures to introduce free trade within the empire. These 
measures stimulated the economic development of peripheral areas 
in northern South America (Venezuela) and southern South Amer- 
ica (Argentina), ending Lima's former monopoly of South Ameri- 
can trade. 

As a result of these and other changes, the economic axis of Peru 
shifted northward to the central and northern Sierra and central 
coast. These areas benefited from the development of silver min- 
ing, particularly at Cerro de Pasco, which was spurred by a series 
of measures taken by the Bourbons to modernize and revitalize 
the industry. However, declining trade and production in the south, 
together with a rising tax burden levied by the Bourbon state, which 
fell heavily on the native peasantry, set the stage for the massive 
native American revolt that erupted with the Tupac Amaru rebel- 
lion in 1780-82. 

Indigenous Rebellions 

An upsurge in native discontent and rebellion had actually begun 
to occur in the eighteenth century. To survive their brutal subju- 
gation, the indigenous peoples had early on adopted a variety of 
strategies. Until recendy, the scholarly literature inaccurately por- 
trayed them as passive. To endure, the native Americans did in- 
deed have to adapt to Spanish domination. As often as not, however, 
they found ways of asserting their own interests. 

After the conquest, the crown had assumed from the Incas 
patrimony over all native land, which it granted in usufruct to in- 
digenous community families, in exchange for tribute payments 



25 



Peru: A Country Study 




6YALT\3HI 



V. 



Pacific 
Ocean 



Santm 




Atlantic 
Ocean 



Montevideo 



IN 

A 



00 





Viceroyalty boundary 


m 


Viceroyalty capital 


o 


Captaincy general capital 




River 




Spanish territory 


1 1 


Portuguese territory 


mm 


Possession disputed by 




Britain and Spain 




1 — 


25 50 Kilometers 





25 50 Miles 



Source: Based on information from A. Curtis Wilgus, Historical Atlas of Latin America, New 
York, 1967, 112; and Anfbal Cueva Garcia, ed., Gran atlas geogrdfico del Peru y el 
mundo, Lima, 1991, 69. 



Figure 2. Three South American Viceroy alties, ca. 1800 

and mita labor services. This system became the basis for a long- 
lasting alliance between the colonial state and the native commu- 
nities, bolstered over the years by the elaboration of a large body 
of protective legislation. Crown officials, such as the corregidores de 
indios, were charged with the responsibility of protecting natives 
from abuse at the hands of the colonists, particularly the aliena- 
tion of their land to private landholders. Nevertheless, the colonists 
and their native allies, the curacas, often in collusion with the corre- 
gidores and local priests, found ways of circumventing crown laws 



26 



Historical Setting 



and gaining control of native American lands and labor. To coun- 
ter such exploitation and to conserve their historical rights to the 
land, many native American leaders shrewdly resorted to the legal 
system. Litigation did not always suffice, of course, and Andean 
history is full of desperate native peasant rebellions. 

The pace of these uprisings increased dramatically in the eigh- 
teenth century, with five in the 1740s, eleven in the 1750s, twenty 
in the 1760s, and twenty in the 1770s. Their underlying causes 
were largely economic. Land was becoming increasingly scarce in 
the communities because of illegal purchases by unscrupulous 
colonists at a time when the indigenous population was once again 
growing after the long, postconquest demographic decline. At the 
same time, the native peasantry felt the brunt of higher taxes levied 
by the crown, part of the general reform program initiated by 
Madrid in the second half of the eighteenth century. These increased 
tax burdens came at a time when the highland elite — corregidores , 
priests, curacas, and Hispanicized native landholders — was itself in- 
creasing the level of surplus extracted from the native American 
peasant economy. According to historian Nils P. Jacobsen, this 
apparent tightening of the colonial "screw" during the eighteenth 
century led to the "over-exploitation" of the native peasantry and 
the ensuing decades of indigenous rebellions. 

The culmination of this protest came in 1780 when Jose Gabriel 
Condorcanqui, a wealthy curaca and mestizo descendant of Inca 
ancestors who sympathized with the oppressed native peasantry, 
seized and executed a notoriously abusive corregidor near Cusco. 
Condorcanqui raised a ragtag army of tens of thousands of natives, 
castas, and even a few dissident Creoles, assuming the name Tupac 
Amaru II after the last Inca, to whom he was related. Drawing 
on a rising tide of Andean millenarianism and nativism, Tupac 
Amaru II raised the specter of some kind of return to a mythic 
Incan past among the indigenous masses at a time of increased eco- 
nomic hardship. 

Captured by royalist forces in 1 781 , Condorcanqui was brought 
to trial and, like his namesake, cruelly executed, along with sev- 
eral relatives, in the main plaza in Cusco, as a warning to others. 
The rebellion continued, however, and even expanded into the 
Altiplano around Lake Titicaca under the leadership of his brother, 
Diego Cristobal Tupac Amaru. It was finally suppressed in 1782, 
and in the following years the authorities undertook to carry out 
some of the reforms that the two native leaders had advocated. 

Independence Imposed from Without, 1808-24 

Despite the Tupac Amaru revolts, independence was slow to 
develop in the Viceroyalty of Peru. For one thing, Peru was a 



27 



Peru: A Country Study 

conservative, royalist stronghold where the potentially restless 
Creole elites maintained a relatively privileged, if dependent, po- 
sition in the old colonial system. At the same time, the "anti-white" 
manifestations of the Tupac Amaru revolt demonstrated that the 
indigenous masses could not easily be mobilized without posing 
a threat to the Creole caste itself. Thus, when independence finally 
did come in 1824, it was largely a foreign imposition rather than 
a truly popular, indigenous, and nationalist movement. As historian 
David P. Werlich has aptly put it, "Peru's role in the drama of 
Latin American independence was largely that of an interested spec- 
tator until the final act." 

What the spectator witnessed prior to 1820 was a civil war in 
the Americas that pitted dissident Creole elites in favor of indepen- 
dence against royalists loyal to the crown and the old colonial order. 
The movement had erupted in reaction to Napoleon Bonaparte's 
invasion of Spain in 1808, which deposed Ferdinand VII and placed 
a usurper, Joseph Bonaparte, on the Spanish throne. In America 
the civil war raised the question of the very political legitimacy of 
the colonial government. When juntas arose in favor of the cap- 
tive Ferdinand in various South American capitals (except in Peru) 
the following year, even though of relatively short duration, they 
touched off a process toward eventual separation that ebbed and 
flowed throughout the continent over the next fifteen years. This 
process developed its greatest momentum at the periphery of Span- 
ish power in South America — in what became Venezuela and 
Colombia in the north and the Rio de la Plata region, particularly 
Argentina, in the south. 

Not until both movements converged in Peru during the latter 
phases of the revolt was Spanish control of Peru seriously threat- 
ened. General Jose de San Martin, the son of a Spanish army officer 
stationed in Argentina, had originally served in the Spanish army 
but returned to his native Argentina to join the rebellion. Once 
Argentine independence was achieved in 1814, San Martin con- 
ceived of the idea of liberating Peru by way of Chile. As commander 
of the 5,500-man Army of the Andes, half of which was composed 
of former black slaves, San Martin, in a spectacular military oper- 
ation, crossed the Andes and liberated Chile in 1817. Three years 
later, his somewhat smaller army left Valparaiso for Peru in a fleet 
commanded by a former British admiral, Thomas Alexander 
Cochrane (Lord Dundonald). 

Although some isolated stirrings for independence had manifested 
themselves earlier in Peru, the landing in Pisco of San Martin's 
4,500-man expeditionary force in September 1820 persuaded the 
conservative Creole intendant of Trujillo, Jose Bernardo de Tagle 



28 



Historical Setting 



y Portocarrero, that Peru's liberation was at hand and that he should 
proclaim independence. It was symptomatic of the conservative 
nature of the viceroyalty that the internal forces now declaring for 
independence were led by a leading Creole aristocrat, the fourth 
marquis of Torre Tagle, whose monarchist sympathies for any fu- 
ture political order coincided with those of the Argentine liberator. 

The defeat of the last bastion of royal power on the continent, 
however, proved a slow and arduous task. Although a number of 
other coastal cities quickly embraced the liberating army, San 
Martin was able to take Lima in July 1821 only when the viceroy 
decided to withdraw his considerable force to the Sierra, where 
he believed he could better make a stand. Shortly thereafter, on 
July 28, 1821 , San Martin proclaimed Peru independent and then 
was named protector by an assembly of notables. However, a num- 
ber of problems, not the least of which was a growing Peruvian 
resentment over the heavy-handed rule of the foreigner they dubbed 
"King Jose," stalled the campaign to defeat the royalists. As a 
result, San Martin decided to seek aid from Simon Bolivar Pala- 
cios, who had liberated much of northern South America from 
Spanish power. 

The two liberators met in a historic meeting in Guayaquil in 
mid- 1822 to arrange the terms of a joint effort to complete the liber- 
ation of Peru. Bolivar refused to agree to a shared partnership in 
the Peruvian campaign, however, so a frustrated San Martin chose 
to resign his command and leave Peru for Chile and eventual exile 
in France. With significant help from San Martin's forces, Bolivar 
then proceeded to invade Peru, where he won the Batde of Junin 
in August 1824. But it remained for his trusted lieutenant, thirty- 
one-year-old General Antonio Jose de Sucre Alcala, to complete 
the task of Peruvian independence by defeating royalist forces at 
the hacienda of Ayacucho near Huamanga (a city later renamed 
Ayacucho) on December 9, 1824. This batde in the remote southern 
highlands effectively ended the long era of Spanish colonial rule 
in South America (see also Colonial Period, ch. 5). 

Post independence Decline and Instability, 1824-45 

Peru's. transition from more than three centuries of colonial rule 
to nominal independence in 1824 under President Bolivar (1824-26) 
proved tortuous and politically destablizing. Independence did little 
to alter the fundamental structures of inequality and underdevelop- 
ment based on colonialism and Andean neofeudalism. Essentially, 
independence represented the transfer of power from Spanish-born 
whites (peninsulares) to sectors of the elite Creole class, whose aim 
was to preserve and enhance their privileged socioeconomic status. 



29 



Peru: A Country Study 

However, the new Creole elite was unable to create a stable, new 
constitutional order to replace the crown monolith of church and 
state. Nor was it willing to restructure the social order in a way 
conducive to building a viable democratic, republican government. 
Ultimately, the problem was one of replacing the legitimacy of the 
old order with an entirely new one, something that many post- 
colonial regimes have had difficulty accomplishing. 

Into the political vacuum left by the collapse of Spanish rule 
surged a particularly virulent form of Andean caudillismo. Caudillo 
strongmen, often officers from the liberation armies, managed to 
seize power through force of arms and the elaboration of extensive 
and intricate clientelistic alliances. Personalistic, arbitrary rule 
replaced the rule of law, and a prolonged and often byzantine strug- 
gle for power was waged at all levels of society. The upshot was 
internal political fragmentation and chronic political instability dur- 
ing the first two decades of the postindependence era. By one count, 
the country experienced at least twenty-four regime changes, aver- 
aging one per year between 1821 and 1845, and the constitution 
was rewritten six times. 

This is not to say that larger political issues did not inform these 
conflicts. A revisionist study by historian Paul E. Gootenberg shows 
in great detail how the politics of trade (free or protectionist) and 
regionalism were central to the internecine caudillo struggles of the 
period. In this interpretation, nationalist elites — backing one cau- 
dillo or another — managed to outmaneuver and defeat liberal 
groups to maintain a largely protectionist, neomercantilistic, post- 
colonial regime until the advent of the guano boom at mid-century. 
This view stands in opposition to the dominant interpretation of 
the period, according to which unrestricted liberalism and free trade 
led to Peru's "dependency" on the international economy and the 
West. 

However bewildering, the chaotic era of the caudillo can be divid- 
ed into several distinct periods. In the first, Bolivar tried, unsuc- 
cessfully, to impose a centralist and Utopian liberal government 
from Lima. When events in Colombia caused him to relinquish 
power and return to Bogota in 1826, his departure left an immediate 
vacuum that numerous Peruvian strongmen would try to fill. One 
of the most successful in terms of tenure was the conservative Gen- 
eral Agustin Gamarra (1829-34) from Cusco, who managed to 
crush numerous rebellions and maintain power for five years. Then 
full-scale civil wars carried first General Luis de Orbegoso (1834-35) 
and then General Felipe Salaverry (1835-36) into the presiden- 
tial palace for short terms. The power struggles reached such a 
chaotic state by the mid- 1830s that General Andres de Santa Cruz 



30 



Historical Setting 



y Calahumana marched into Peru from Bolivia to impose the Peru- 
Bolivia Confederation of 1836-39. This alliance upset the region- 
al balance of power and caused Chile to raise an army to defeat 
Santa Cruz and restore the status quo ante, which, in effect, meant 
a resumption of factional conflict lasting well into the 1840s. 

The descent into chronic political instability, coming immedi- 
ately after the destructive wars for independence (1820-24), ac- 
celerated Peru's general postindependence economic decline. 
During the 1820s, silver mining, the country's traditional engine 
of growth, collapsed, and massive capital flight resulted in large 
external deficits. By the early 1830s, the silver-mining industry 
began to recover, briefly climbing back to colonial levels of output 
in the early 1840s. Economic recovery was further enhanced in the 
1840s as southern Peru began to export large quantities of wool, 
nitrates, and, increasingly, guano. 

On the other hand, the large-scale importation of British tex- 
tiles after independence virtually destroyed the production of na- 
tive artisans and obrajes, which were unable to compete with their 
more technologically advanced and cost-efficient overseas compet- 
itors. For the most part, however, the economy continued in the 
immediate decades after independence to be characterized by a low 
level of marketable surplus from largely self-sufficient haciendas 
and native communities. 

The expansion of exports during the 1840s did help, finally, to 
stabilize the Peruvian state, particularly under the statesmanlike, 
if autocratic, leadership of General Marshal Ramon Castilla (1845- 
51, 1855-62). Castilla's rise to power, coming as it did at the onset 
of the guano boom, marked the beginning of an age of unparalleled 
economic growth and increasing political stability that effectively 
ended the country's postindependence decline. Indeed, to many 
observers, Peru during the so-called guano age (1845-70) seemed 
uniquely positioned to emerge as the preeminent country in all of 
South America. 

The Guano Era, 1845-70 

Consolidation of the State 

The guano boom, made possible by the droppings from millions 
of birds on the Chincha Islands, proved to be a veritable bonanza 
for Peru, beginning in the 1840s. By the time that this natural 
resource had been depleted three decades later, Peru had exported 
some 12 million tons of the fertilizer to Europe and North Amer- 
ica, where it stimulated the commercial agricultural revolution. On 
the basis of a truly enormous flow of revenue to the state (nearly 



31 



Peru: A Country Study 



US$500 million), Peru was presented in the middle decades of the 
nineteenth century with a historic opportunity for development. 
Why this did not materialize, but rather became a classic case of 
boom-bust export dependence, has continued to be the subject of 
intense discussion and debate. Most analysts, however, concur with 
historian Magnus Morner that "guano wealth was, on the whole, 
a developmental opportunity missed." 

On the positive side, guano-led economic growth — on average 
9 percent a year beginning in the 1840s — and burgeoning govern- 
ment coffers provided the basis for the consolidation of the state. 
With adequate revenues, Castilla was able to retire the internal 
and external debt and place the government on a sound financial 
footing for the first time since independence. That, in turn, shored 
up the country's credit rating abroad (which, however, in time 
proved to be a double-edged sword in the absence of fiscal restraint). 
It also enabled Castilla to abolish vestiges of the colonial past — 
slavery in 1854 and the onerous native tribute — modernize the 
army, and centralize state power at the expense of local caudillos. 

Failed Development 

The guano bonanza also set in motion more negative trends. 
Castilla "nationalized' ' guano in order to maximize benefits to the 
state but in so doing reinforced aspects of the old colonial pattern 
of a mercantilist political economy. The state then consigned the 
commercialization of guano to certain favored private sectors based 
in Lima that had foreign connections. This action created a nefar- 
ious and often collusive relationship between the state and a new 
"liberal" group of guano consignees. 

Soon, this increasingly powerful liberal plutocracy succeeded in 
reorienting the country's trade policy away from the previous na- 
tionalist and protectionist era toward export-led growth and low 
tariffs (see Historical Background, ch. 3). Capital investment de- 
rived from the guano boom and abroad flowed into the export sec- 
tor, particularly sugar, cotton, and nitrate production. The coast 
now became the most economically dynamic region of the coun- 
try, modernizing at a pace that outstripped the Sierra. Coastal 
export-led growth not only intensified the uneven and dualist na- 
ture of Peruvian development, but subjected the economy to the 
vicissitudes of world trade. Between 1840 and 1875, the value of 
exports surged from 6 million pesos to almost 32 million, and im- 
ports went from 4 to 24 million pesos. On the face of it, the liberal 
export model, based on guano, pulled Peru out of its postindepen- 
dence economic stagnation and seemed dramatically successful. 
However, while great fortunes were accruing to the new coastal 



32 



Historical Setting 



plutocracy, little thought was given to closing the historical in- 
equalities of wealth and income or to fostering a national market 
for incipient home manufacturing that might have created the foun- 
dation for a more diversified and truly long-term economic de- 
velopment. 

What proved a greater problem in the short term was the state's 
increasing reliance and ultimate dependence on foreign loans, se- 
cured by the guano deposits, which, however, were a finite and 
increasingly depleted natural resource. These loans helped finance 
an overly ambitious railroad and road-building scheme in the 1860s 
designed to open up Peru's natural, resource-rich interior to ex- 
ploitation. Under the direction of American railroad engineer Henry 
Meiggs (known as the "Yankee Pizarro"), Chinese workers con- 
structed a spectacular Andean railroad system over some of the 
most difficult topography in the world. But the cost of construct- 
ing some 1 ,240 kilometers of railroad, together with a litany of other 
state expenditures, caused Peru to jump from last to first place as 
the world's largest borrower on London money markets. 

Peru also fought two brief but expensive wars. The first, in which 
Peru prevailed, was with Ecuador (1859-60) over disputed terri- 
tory bordering the Amazon. However, Castilla failed to extract a 
definitive agreement from Ecuador that might have settled con- 
clusively the border issue, so it continued to fester throughout the 
next century. More successful was the Peruvian victory in 1866 
over Spain's attempts to seize control of the guano-rich Chincha 
Islands in a tragicomic venture to recapture some of its lost em- 
pire in South America. 

By the 1870s, Peru's financial house of cards, constructed on 
guano, finally came tumbling down. As described by Gootenberg, 
"Under the combined weight of manic activity, unrestrained bor- 
rowing, dismal choice of developmental projects, the evaporation 
of guano, and gross fiscal mismanagement, Peru's state finally col- 
lapsed. ..." Ironically, the financial crisis occurred during the 
presidency of Manuel Pardo (1872-76), the country's first elected 
civilian president since independence and leader of the fledgling 
antimilitary Civilista Party (Partido Civilista — PC). 

By the 1870s, economic growth and greater political stability had 
created the conditions for the organization of the country's first 
political party. It was composed primarily of the plutocrats of the 
guano era, the newly rich merchants, planters, and businesspeople, 
who believed that the country could no longer afford to be governed 
by the habitual military "man on horseback." Rather, the new 
age of international trade, business, and finance needed the 
managerial skills that only civilian leadership could provide. Their 



33 



Peru: A Country Study 



candidate was the dynamic and cosmopolitan Pardo, who, at age 
thirty-seven, had already made a fortune in business and served 
with distinction as treasury minister and mayor of Lima. Who bet- 
ter, they asked, at a time when the government of Colonel Jose 
Balta (1868-72) had sunk into a morass of corruption and incompe- 
tence, could clean up the government, deal with the mounting finan- 
cial problems, and further develop the liberal export-model that 
so benefited their particular interests? 

However, the election of the competent Pardo in 1872 and his 
ensuing austerity program were not enough to ward off the im- 
pending collapse. The worldwide depression of 1873 virtually sealed 
Peru's fate, and as Pardo's term drew to a close in 1876, the coun- 
try was forced to default on its foreign debt. With social and polit- 
ical turmoil once again on the rise, the Civilistas found it expedient 
to turn to a military figure, Mariano Ignacio Prado (1865-67, 
1876-79), who had rallied the country against the Spanish naval 
attack in 1865 and then served as. president. He was reelected presi- 
dent in 1876 only to lead the country into a disastrous war with 
its southern neighbor Chile in 1879. 

The War of the Pacific, 1879-83 

The war with Chile developed over the disputed, nitrate-rich 
Atacama Desert. Neither Peru, nor its ally, Bolivia, in the regional 
balance of power against Chile, had been able to solidify its ter- 
ritorial claims in the desert, which left the rising power of Chile 
to assert its designs over the region. Chile chose to attack Bolivia 
after Bolivia broke the Treaty of 1866 between the two countries 
by raising taxes on the export of nitrates from the region, mainly 
controlled by Chilean companies. In response, Bolivia invoked its 
secret alliance with Peru, the Treaty of 1873, to go to war. 

Peru was obligated, then, to enter a war for which it was woe- 
fully unprepared, particularly since the antimilitary Pardo govern- 
ment had sharply cut the defense budget. With the perspective of 
hindsight, the outcome with Peru's more powerful and better or- 
ganized foe to the south was altogether predictable. This was es- 
pecially true after Peru's initial defeat in the naval Battle of Iquique 
Bay, where it lost one of its two iron-clad warships. Five months 
later, it lost the other, allowing Chile to gain complete control of 
the sea lanes and thus to virtually dictate the pace of the war. 
Although the Peruvians fought the superior Chilean expedition- 
ary forces doggedly thereafter, resorting to guerrilla action in the 
Sierra after the fall of Lima in 1881, they were finally forced to 
conclude a peace settlement in 1883. The Treaty of Ancon ceded 
to Chile in perpetuity the nitrate-rich province of Tarapaca and 



34 



Historical Setting 



provided that the provinces of Tacna and Arica would remain in 
Chilean possession for ten years, when a plebiscite would be held 
to decide their final fate (see fig. 3). After repeated delays, both 
countries finally agreed in 1929, after outside mediation by the 
United States, to a compromise solution to the dispute by which 
Tacna would be returned to Peru and Chile would retain Arica. 
For Peru, defeat and dismemberment by Chile in war brought to 
a final disastrous conclusion an era that had begun so auspiciously 
in the early 1840s with the initial promise of guano-led develop- 
ment (see also Postindependence: Military Defeat and Nation- 
Building, ch. 5). 

Recovery and Growth, 1883-1930 
The New Militarism, 1886-95 

After a period of intense civil strife similar to the political chaos 
during the immediate postindependence period half a century 
earlier, the armed forces, led by General Andres Avelino Caceres 
(1886-90, 1894-95), succeeded in establishing a measure of order 
in the country. Caceres, a Creole and hero of the guerrilla resistance 
to the Chilean occupation during the War of the Pacific, managed 
to win the presidency in 1886. He succeeded in imposing a gen- 
eral peace, first by crushing a native rebellion in the Sierra led by 
a former ally, the respected native American varayoc (leader) Pedro 
Pablo Atusparia (see Landlords and Peasant Revolts in the High- 
lands, ch. 2). Caceres then set about the task of reconstructing the 
country after its devastating defeat. 

The centerpiece of his recovery program was the Grace Con- 
tract, a controversial proposal by a group of British bondholders 
to cancel Peru's foreign debt in return for the right to operate the 
country's railroad system for sixty- six years. The contract provoked 
great controversy between nationalists, who saw it as a sellout to 
foreign interests, and liberals, who argued that it would lay the 
basis for economic recovery by restoring Peru's investment and 
creditworthiness in the West. Finally approved by Congress in 1888, 
the Grace Contract, together with a robust recovery in silver produc- 
tion (US$35 million by 1895), laid the foundations for a revival 
of export-led growth. 

Indeed, economic recovery would soon turn into a sustained, 
long-term period of growth. Nils Jacobsen has calculated that "Ex- 
ports rose fourfold between the nadir of 1883 and 1910, from 1.4 
to 6.2 million pounds sterling and may have doubled again until 
1919; British and United States capital investments grew nearly 
tenfold between 1880 and 1919, from US$17 to US$161 million." 



35 



Peru: A Country Study 



Boundary representation 
r* not necessarily authoritative 



Present-day international 
boundary 
Disputed area boundary 




BOLIVIA 



Present-day department or 
province capital 

Populated place 

Peruvian territory administered 
by Chile, 1883-1929; 
awarded to Peru. 1929 

Peruvian territory administered 
by Chile, ■1883-1929; 
awarded to Chile by Peru, 1929 

Awarded to Chile by 
Peru, 1883 



Awarded to Chile by 
Bolivia, 1883 



Awarded to Chile by 
Bolivia, 1874 

50 100 Kilometers 




Tocopttla | 



^Pacific 
Ocean 




■ A 



) 



ARGENTINA 



Source: Based on information from David P. Werlich, Peru: A Short History, Carbondale, 
Illinois, 1978, 110-11. 



Figure 3. Territorial Adjustments among Bolivia, Chile, and Peru, 1874- 
1929 



36 



Historical Setting 



However, he also notes that it was not until 1920 that the nation 
fully recovered from the losses sustained between the depression 
of 1873 and the postwar beginnings of recovery at the end of the 
1880s. Once underway, economic recovery inaugurated a long 
period of stable, civilian rule beginning in 1895. 

The Aristocratic Republic, 1895-1914 

The Aristocratic Republic began with the popular "Revolution 
of 1895," led by the charismatic and irrepressible Jose Nicolas de 
Pierola (1895-99). He overthrew the increasingly dictatorial Caceres, 
who had gained the presidency again in 1894 after having placed 
his crony Colonel Remigio Morales Bermudez (1890-94) in power 
in 1890. Pierola, an aristocratic and patriarchal figure, was fond 
of saying that ' 'when the people are in danger, they come to me. ' ' 
Although he had gained the intense enmity of the Civilistas in 1869 
when, as minister of finance in the Balta government, he had trans- 
ferred the lucrative guano consignment contract to the foreign firm 
of Dreyfus and Company of Paris, he now succeeded in forging 
an alliance with his former opponents. This alliance began a period 
known as the Aristocratic Republic (1895-1914), during which Peru 
was characterized not only by relative political harmony and rapid 
economic growth and modernization, but also by social and polit- 
ical change. 

From the ruins of the War of the Pacific, new elites had emerged 
along the coast and coalesced to form a powerful oligarchy, based 
on the reemergence of sugar, cotton, and mining exports, as well 
as the reintegration of Peru into the international economy. Its po- 
litical expression was the reconstituted Civilista Party, which had 
revived its antimilitary and proexport program during the period 
of intense national disillusion and introspection that followed the 
country's defeat in the war. By the time the term of Pierola' s suc- 
cessor, Eduardo Lopez de Romana (1899-1903), came to an end, 
the Civilistas had cleverly managed to gain control of the national 
electoral process and proceeded to elect their own candidate and 
party leader, the astute Manuel Candamo (1903-1904), to the 
presidency. Thereafter, they virtually controlled the presidency up 
until World War I, although Candamo died a few months after 
assuming office. Elections, however, were restricted, subject to strict 
property and literacy qualifications, and more often than not 
manipulated by the incumbent Civilista regime. 

The Civilistas were the architects of unprecedented political sta- 
bility and economic growth, but they also set in motion profound 
social changes that would, in time, alter the political panorama. 
With the gradual advance of export capitalism, peasants migrated 



37 



Peru: A Country Study 

and became proletarians, laboring in industrial enclaves that arose 
not only in Lima, but in areas of the countryside as well. The tradi- 
tional haciendas and small-scale mining complexes that could be 
connected to the international market gave way increasingly to 
modern agroindustrial plantations and mining enclaves. With the 
advent of World War I, Peru's international markets were tem- 
porarily disrupted and social unrest intensified, particularly in urban 
centers where a modern labor movement began to take shape. 

Impact of World War I 

The Civilistas, however, were unable to manage the new social 
forces that their policies unleashed. This fact first became appar- 
ent in 1912 when the millionaire businessman Guillermo Billing- 
hurst (1912-14) — the reform-minded, populist former mayor of 
Lima — was able to organize a general strike to block the election 
of the official Civilista presidential candidate and force his own elec- 
tion by Congress. During his presidency, Billinghurst became em- 
broiled in an increasingly bitter series of conflicts with Congress, 
ranging from proposed advanced social legislation to settlement of 
the Tacna-Arica dispute. When Congress opened impeachment 
hearings in 1914, Billinghurst threatened to arm the workers and 
forcibly dissolve Congress. The threat provoked the armed forces 
under Colonel Oscar Raimundo Benavides (1914-15, 1933-36, and 
1936-39) to seize power. 

The coup marked the beginning of a long-term alignment of the 
military with the oligarchy, whose interests and privileges it would 
defend up until the 1968 revolution of General Juan Velasco 
Alvarado (1968-75). It was also significant because it not only ended 
almost two decades of uninterrupted civilian rule, but, unlike past 
military interventions, was more institutional than personalist in 
character. Benavides was a product of Pierola's attempt to profes- 
sionalize the armed forces under the tutelage of a French military 
mission, beginning in 1896, and therefore was uncomfortable in 
his new political role. Within a year, he arranged new elections 
that brought Jose de Pardo y Barreda (1904-1908, 1915-19) to 
power. 

A new round of economic problems, deepening social unrest, 
and powerful, new ideological currents toward the end of World 
War I, however, converged to bring a generation of Civilista rule 
to an end in 1919. The war had a roller coaster effect on the Peru- 
vian economy. First, export markets were temporarily cut off, 
provoking recession. Then, when overseas trade was restored, 
stimulating demand among the combatants for Peru's primary 



38 



Historical Setting 



products, an inflationary spiral saw the cost of living nearly double 
between 1913 and 1919. 

This inflation had a particularly negative impact on the new work- 
ing classes in Lima and elsewhere in the country. The number of 
workers had grown sharply since the turn of the century — by one 
count rising from 24,000, or 17 percent of the capital's population 
in 1908, to 44,000, or 20 percent of the population in 1920. Simi- 
lar growth rates occurred outside of Lima in the export enclaves 
of sugar (30,000 workers), cotton (35,000), oil (22,500), and cop- 
per. The Cerro de Pasco copper mine alone had 25,500 workers. 
The growth and concentration of workers was accompanied by the 
spread of anarcho-syndicalist ideas before and during the war years, 
making the incipient labor movement increasingly militant. Vio- 
lent strikes erupted on sugar plantations, beginning in 1910, and 
the first general strike in the country's history occurred a year later. 

Radical new ideologies further fueled the growing social unrest 
in the country at the end of the war. The ideas of the Mexican 
and Russian revolutions, the former predating the latter, quickly 
spread radical new doctrines to the far corners of the world, in- 
cluding Peru. Closer to home, the indigenista (indigenous) move- 
ment increasingly captured the imagination of a new generation 
of Peruvians, particularly urban, middle-class mestizos who were 
reexamining their roots in a changing Peru. Indigenismo (indigenism) 
was promoted by a group of writers and artists who sought to redis- 
cover and celebrate the virtues and values of Peru's glorious Incan 
past. Awareness of the indigenous masses was heightened at this 
time by another wave of native uprisings in the southern highlands. 
They were caused by the disruption and dislocation of traditional 
native American communities brought about by the opening of new 
international markets and reorganization of the wool trade in the 
region. 

All of these social, economic, and intellectual trends came to a 
head at the end of the Pardo administration. In 1918-19 Pardo 
faced an unprecedented wave of strikes and labor mobilization that 
was joined by student unrest over university reform. The ensuing 
worker-student alliance catapulted a new generation of radical 
reformers, headed by Victor Raul Haya de la Torre — a young, 
charismatic student at San Marcos University — and Jose Carlos 
Mariategui — a brilliant Lima journalist who defended the rights 
of the new, urban working class — to national prominence. 

The Eleven-Year Rule, 1919-30 

The immediate political beneficiary of this turmoil, however, 
was a dissident Civilista, former president Augusto B. Legufa y 



39 



Peru: A Country Study 



Salcedo (1908-12, 1919-30), who had left the party after his first 
term. He ran as an independent in the 1919 elections on a reform 
platform that appealed to the emerging new middle and working 
classes. When he perceived a plot by the Civilistas to deny him 
the election, the diminutive but boundlessly energetic Leguia (he 
stood only 1.5 meters tall and weighed a little over 45 kilograms) 
staged a preemptive coup and assumed the presidency. 

Legufa's eleven-year rule, known as the oncenio (1919-30), began 
auspiciously enough with a progressive, new constitution in 1920 
that enhanced the power of the state to carry out a number of popu- 
lar social and economic reforms. The regime weathered a brief post- 
war recession and then generated considerable economic growth 
by opening the country to a flood of foreign loans and investment. 
The economic growth allowed Leguia to replace the Civilista oligar- 
chy with a new, if plutocratic, middle-class political base that 
prospered from state contracts and expansion of the government 
bureaucracy. However, it was not long into his regime that Legufa's 
authoritarian and dictatorial tendencies appeared. He cracked down 
on labor and student militancy, purged the Congress of opposi- 
tion, and amended the constitution so that he could run, unop- 
posed, for reelection in 1924 and again in 1929. 

Legufa's popularity was further eroded as a result of a border 
dispute between Peru and Colombia involving territory in the 
rubber-tapping region between the Rio Caqueta and the northern 
watershed of the Rio Napo. Under the United States-mediated 
Salomon-Lozano Treaty of March 1922, which favored Colom- 
bia, the Rio Putumayo was established as the boundary between 
Colombia and Peru (see fig. 4). Pressured by the United States 
to accept the unpopular treaty, Leguia finally submitted the docu- 
ment to the Peruvian Congress in December 1927, and it was rati- 
fied. The treaty was also unpopular with Ecuador, which found 
itself surrounded on the east by Peru. 

The orgy of financial excesses, which included widespread cor- 
ruption and the massive build-up of the foreign debt, was brought 
to a sudden end by the Wall Street stock market crash of 1929 and 
ensuing worldwide depression. Legufa's eleven-year rule, the long- 
est in Peruvian history, collapsed a year later. Once again, the mili- 
tary intervened and overthrew Leguia, who died in prison in 1932. 

Meanwhile, the onset of the Great Depression galvanized the 
forces of the left. Before he died prematurely at the age of thirty- 
five in 1930, Mariategui founded the Peruvian Socialist Party (Par- 
tido Socialista Peruano — PSP), shortly to become the Peruvian 
Communist Party (Partido Comunista Peruano — PCP), which set 
about the task of political organizing after Legufa's fall from power. 



40 



Historical Setting 



Although a staunch Marxist who believed in the class struggle and 
the revolutionary role of the proletariat, Mariategui's main con- 
tribution was to recognize the revolutionary potential of Peru's na- 
tive peasantry. He argued that Marxism could be welded to an 
indigenous Andean revolutionary tradition that included indigenismo, 
the long history of Andean peasant rebellion, and the labor move- 
ment. 

Haya de la Torre returned to Peru from a long exile to organize 
the American Popular Revolutionary Alliance (Alianza Popular 
Revolucionaria Americana — APRA), an anti-imperialist, conti- 
nent-wide, revolutionary alliance, founded in Mexico in 1924. For 
Haya de la Torre, capitalism was still in its infancy in Peru and 
the proletariat too small and undeveloped to bring about a revolu- 
tion against the Civilista oligarchy. For that to happen, he argued, 
the working classes must be joined to radicalized sectors of the new 
middle classes in a cross-class, revolutionary alliance akin to pop- 
ulism. Both parties — one from a Marxist and the other from a 
populist perspective — sought to organize and lead the new middle 
and working classes, now further dislocated and radicalized by the 
Great Depression. With his oratorical brilliance, personal mag- 
netism, and national-populist message, Haya de la Torre was able 
to capture the bulk of these classes and to become a major figure 
in Peruvian politics until his death in 1980 at the age of eighty-six. 

Mass Politics and Social Change, 1930-68 
Impact of the Depression and World War II 

After 1930 both the military, now firmly allied with the oligar- 
chy, and the forces of the left, particularly APRA, became impor- 
tant new actors in Peruvian politics. This period (1930-68) has been 
characterized in political terms by sociologist Dennis Gilbert as oper- 
ating under essentially a ''tripartite" political system, with the mili- 
tary often ruling at the behest of the oligarchy to suppress the 
"unruly" masses represented by APRA and the PC P. Lieutenant 
Colonel Luis M. Sanchez Cerro and then General Benavides led 
another period of military rule during the turbulent 1930s. 

In the presidential election of 1931, Sanchez Cerro (1931-33), 
capitalizing on his popularity from having deposed the dictator 
Legufa, barely defeated APRA's Haya de la Torre, who claimed 
to have been defrauded out of his first bid for office. In July 1932, 
APRA rose in a bloody popular rebellion in Trujillo, Haya de la 
Torre's hometown and an APRA stronghold, that resulted in the 
execution of some sixty army officers by the insurgents. Enraged, 
the army unleashed a brutal suppression that cost the lives of at 



41 



Peru: A Country Study 




42 



Historical Setting 



least 1,000 Apristas (APRA members) and their sympathizers 
(partly from aerial bombing, used for the first time in South Ameri- 
can history). Thus began what would become a virtual vendetta 
between the armed forces and APRA that would last for at least 
a generation and on several occasions prevented the party from 
coming to power. 

Politically, the Trujillo uprising was followed shortly by another 
crisis, this time a border conflict with Colombia over disputed ter- 
ritory in the Leticia region of the Amazon. Before it could be set- 
tled, Sanchez Cerro was assassinated in April 1933 by a militant 
Aprista, and Congress quickly elected former president Benavides 
to complete Sanchez Cerro's five-year term. Benavides managed 
to settle the thorny Leticia dispute peacefully, with assistance from 
the League of Nations, when a Protocol of Peace, Friendship, and 
Cooperation was signed in May 1934 ratifying Colombia's origi- 
nal claim. After a disputed election in 1936, in which Haya de la 
Torre was prevented from running and which Benavides nullified 
with the reluctant consent of Congress, Benavides remained in 
power and extended his term until 1939. 

During the 1930s, Peru's economy was one of the least affected 
by the Great Depression. Thanks to a relatively diversified range 
of exports, led by cotton and new industrial metals (particularly 
lead and zinc), the country began a rapid recovery of export earn- 
ings as early as 1933. As a result, unlike many other Latin Ameri- 
can countries that adopted Keynesian and import-substitution 
industrialization (see Glossary) measures to counteract the decline, 
Peru's policymakers made relatively few alterations in their long- 
term model of export-oriented growth. 

Under Sanchez Cerro, Peru did take measures to reorganize its 
debt-ridden finances by inviting Edwin Kemmerer, a well-known 
United States financial consultant, to recommend reforms. Follow- 
ing his advice, Peru returned to the gold standard, but could not 
avoid declaring a moratorium on its US$180-million debt on April 
1, 1931. For the next thirty years, Peru was barred from the United 
States capital market. 

Benavides 's policies combined strict economic orthodoxy, mea- 
sures of limited social reform designed to attract the middle classes 
away from APRA, and repression against the left, particularly 
APRA. For much of the rest of the decade, APRA continued to 
be persecuted and remained underground. Almost from the mo- 
ment APRA appeared, the party and Haya de la Torre had been 
attacked by the oligarchy as antimilitary, anticlerical, and "com- 
munistic." Indeed, the official reason often given for APRA's 
proscription was its "internationalism" because the party began 



43 



Peru: A Country Study 



as a continent- wide alliance "against Yankee imperialism" — 
suggesting that it was somehow subversively un-Peruvian. 

Haya de la Torre had also flirted with the Communists during 
his exile in the 1920s, and his early writings were influenced by 
a number of radical thinkers, including Marx. Nevertheless, the 
1931 APRA program was essentially reformist, nationalist, and 
populist. It called, among other things, for a redistributive and in- 
terventionist state that would move to selectively nationalize land 
and industry. Although certainly radical from the perspective of 
the oligarchy, the program was designed to correct the historical 
inequality of wealth and income in Peru, as well as to reduce and 
bring under greater governmental control the large-scale foreign 
investment in the country that was high in comparison with other 
Andean nations. 

The intensity of the oligarchy's attacks was also a response to 
the extreme rhetoric of APRA polemicists and reflected the pola- 
rized state of Peruvian society and politics during the Depression. 
Both sides readily resorted to force and violence, as the bloody events 
of the 1930s readily attested — the 1932 Trujillo revolt, the spate 
of prominent political assassinations (including Sanchez Cerro and 
Antonio Miro Quesada, publisher of El Comercio), and widespread 
imprisonment and torture of Apristas and their sympathizers. It 
also revealed the oligarchy's apprehension, indeed paranoia, at 
APRA's sustained attempt to mobilize the masses for the first time 
into the political arena. At bottom, Peru's richest, most powerful 
forty families perceived a direct challenge to their traditional 
privileges and absolute right to rule, a position they were not to 
yield easily. 

When Benavides's extended term expired in 1939, Manuel Prado 
y Ugarteche (1939-45), a Lima banker from a prominent family 
and son of a former president, won the presidency. He was soon 
confronted with a border conflict with Ecuador that led to a brief 
war in 1941. After independence, Ecuador had been left without 
access to either the Amazon or the region's other major waterway, 
the Rio Maranon, and thus without direct access to the Atlantic 
Ocean. In an effort to assert its territorial claims in a region near 
the Rio Maranon in the Amazon Basin, Ecuador occupied militarily 
the town of Zarumilla along its southwestern border with Peru. 
However, the Peruvian Army (Ejercito Peruano — EP) responded 
with a lightning victory against the Ecuadorian Army. At subse- 
quent peace negotiations in Rio de Janeiro in 1942, Peru's owner- 
ship of most of the contested region was affirmed. 

On the domestic side, Prado gradually moved to soften official 
opposition to APRA, as Haya de la Torre moved to moderate the 



44 



Historical Setting 



party's program in response to the changing national and interna- 
tional environment brought on by World War II. For example, 
he no longer proposed to radically redistribute income, but instead 
proposed to create new wealth, and he replaced his earlier strident 
"anti-imperialism" directed against the United States with more 
favorable calls for democracy, foreign investment, and hemispheric 
harmony. As a result, in May 1945 Prado legalized the party that 
now reemerged on the political scene after thirteen years under- 
ground. 

The Allied victory in World War II reinforced the relative 
democratic tendency in Peru, as Prado 's term came to an end in 
1945. Jose Luis Bustamante y Rivero (1945-48), a liberal and 
prominent international jurist, was overwhelmingly elected presi- 
dent on the basis of an alliance with the now legal APRA. Respond- 
ing to his more reform- and populist-oriented political base, 
Bustamante and his Aprista minister of economy moved Peru away 
from the strictly orthodox, free-market policies that had charac- 
terized his predecessors. Increasing the state's intervention in the 
economy in an effort to stimulate growth and redistribution, the 
new government embarked on a general fiscal expansion, increased 
wages, and established controls on prices and exchange rates. The 
policy, similar to APRA's later approach in the late 1980s, was 
neither well-conceived nor efficiently administered and came at a 
time when Peru's exports, after an initial upturn after the war, 
began to sag. This resulted in a surge of inflation and labor unrest 
that ultimately destabilized the government. 

Bustamante also became embroiled in an escalating political con- 
flict with the Aprista-controlled Congress, further weakening the 
administration. The political waters were also roiled in 1947 by 
the assassination by Aprista militants of Francisco Grana Garland, 
the socially prominent director of the conservative newspaper La 
Prensa. When a naval mutiny organized by elements of APRA broke 
out in 1948, the military, under pressure from the oligarchy, over- 
threw the government and installed General Manuel A. Odna 
(1948-50, 1950-56), hero of the 1941 war with Ecuador, as presi- 
dent. 

Rural Stagnation and Social Mobilization, 1948-68 

Odna imposed a personalistic dictatorship on the country and 
returned public policy to the familiar pattern of repression of the 
left and free-market orthodoxy. Indicative of the new regime's 
hostility toward APRA, Haya de la Torre, after seeking political 
asylum in the Embassy of Colombia in Lima in 1949, was prevented 
by the government from leaving the country. He remained a virtual 



45 



Peru: A Country Study 



prisoner in the embassy until his release into exile in 1954. However, 
along with such repression Odria cleverly sought to undermine 
APRA's popular support by establishing a dependent, paternalis- 
tic relationship with labor and the urban poor through a series of 
charity and social welfare measures. 

At the same time, Odria' s renewed emphasis on export-led 
growth coincided with a period of rising prices on the world mar- 
ket for the country's diverse commodities, engendered by the out- 
break of the Korean War in 1950. Also, greater political stability 
brought increased national and foreign investment, particularly in 
the manufacturing sector. Indeed, this sector grew almost 8 per- 
cent annually between 1950 and 1967, increasing from 14 to 20 
percent of gross domestic product (GDP — see Glossary). Overall, 
the economy experienced a prolonged period of strong, export-led 
growth, amounting on average to 5 percent a year during the same 
period (see Historical Background, ch. 3). 

Not all Peruvians, however, benefited from this period of sus- 
tained capitalist development, which tended to be regional and con- 
fined mainly to the more modernized coast. This uneven pattern 
of growth served to intensify the dualistic structure of the country 
by widening the historical gap between the Sierra and the coast. 
In the Sierra, the living standard of the bottom one-quarter of the 
population stagnated or fell during the twenty years after 1950. 
In fact, the Sierra had been losing ground economically to the 
modernizing forces operative on the coast ever since the 1920s. With 
income distribution steadily worsening, the Sierra experienced a 
period of intense social mobilization during the 1950s and 1960s. 

This fact was manifested first in the intensification of rural-urban 
migration and then in a series of confrontations between peasants 
and landowners. The fundamental causes of these confrontations 
were numerous. Population growth, which had almost doubled na- 
tionally between 1900 and 1940 (3.7 million to 7 million), increased 
rapidly to 13.6 million by 1970. Such growth turned the labor mar- 
ket from a state of chronic historical scarcity to one of abundant 
surplus. With arable land constant and locked into the system of 
latifundios (see Glossary), ownership-to-area ratios deteriorated 
sharply, increasing peasant pressures on the land. 

Peru's land-tenure system remained one of the most unequal 
in Latin America. In 1958 the country had a high coefficient of 
0.88 on the Gini index, which measures land concentration on a 
scale of to 1 . Figures for the same year show that 2 percent of 
the country's landowners controlled 69 percent of arable land. Con- 
versely, 83 percent of landholders holding no more than 5 hectares 
controlled only 6 percent of arable land. Finally, the Sierra's terms 



46 



Historical Setting 



of trade (see Glossary) in agricultural foodstuffs steadily declined 
because of the state's urban bias in food pricing policy, which kept 
farm prices artificially low (see Employment and Wages, Poverty, 
and Income Distribution, ch. 3). 

Many peasants opted to migrate to the coast, where most of the 
economic and job growth was occurring. The population of 
metropolitan Lima, in particular, soared. Standing at slightly over 
500,000 in 1940, it increased threefold to over 1.6 million in 1961 
and nearly doubled again by 1981 to more than 4.1 million. The 
capital became increasingly ringed with squalid barriadas (shanty- 
towns — see Glossary) of urban migrants, putting pressure on the 
liberal state, long accustomed to ignoring the funding of govern- 
ment services to the poor. 

Those peasants who chose to remain in the Sierra did not re- 
main passive in the face of their declining circumstances but be- 
came increasingly organized and militant. A wave of strikes and 
land invasions swept over the Sierra during the 1950s and 1960s 
as campesinos demanded access to land. Tensions grew especially 
in the Convention and Lares region of the high jungle near Cusco, 
where Hugo Blanco, a Quechua-speaking Trotskyite and former 
student leader, mobilized peasants in a militant confrontation with 
local gamonales. 

While economic stagnation prodded peasant mobilization in the 
Sierra, economic growth along the coast produced other impor- 
tant social changes. The postwar period of industrialization, ur- 
banization, and general economic growth created a new middle 
and professional class that altered the prevailing political panorama. 
These new middle sectors formed the social base for two new po- 
litical parties — Popular Action (Action Popular — AP) and the 
Christian Democratic Party (Partido Democrata Cristiano — 
PDC) — that emerged in the 1950s and 1960s to challenge the oligar- 
chy with a moderate, democratic reform program. Emphasizing 
modernization and development within a somewhat more activist 
state framework, they posed a new challenge to the old left, par- 
ticularly APR A. 

For its part, APR A accelerated its right ward tendency. It en- 
tered into what many saw as an unholy alliance (dubbed the con- 
vivencia, or living together) with its old enemy, the oligarchy, by 
agreeing to support the candidacy of conservative Manuel Prado 
y Ugarteche in the 1956 elections, in return for legal recognition. 
As a result, many new voters became disillusioned with APRA and 
flocked to support the charismatic reformer Fernando Belaunde 
Terry (1963-68, 1980-85), the founder of the AP. Although Prado 
won, six years later the army intervened when its old enemy, Haya 



47 



Peru: A Country Study 

de la Torre (back from six years of exile), still managed, if barely, 
to defeat the upstart Belaunde by less than one percentage point 
in the 1962 elections. A surprisingly reform-minded junta of the 
armed forces headed by General Ricardo Perez Godoy held power 
for a year (1962-63) and then convoked new elections. This time 
Belaunde, in alliance with the Christian Democrats, defeated Hay a 
de la Torre and became president. 

Belaunde 's government, riding the crest of the social and politi- 
cal discontent of the period, ushered in a period of reform at a time 
when United States president John F. Kennedy's Alliance for 
Progress (see Glossary) was also awakening widespread expecta- 
tions for reform throughout Latin America. Belaunde tried to diffuse 
the growing unrest in the highlands through a three-pronged ap- 
proach: modest agrarian reform, colonization projects in the high 
jungle or Montana, and the construction of the north-south Jun- 
gle Border Highway (la carretera marginal de la selva, or la marginal), 
running the entire length of the country along the jungle fringe. 
The basic thrust of the Agrarian Reform Law of 1969, which was 
substantially watered down by a conservative coalition in Congress 
between the APRA and the National Odriist Union (Union Na- 
cional Odrifsta — UNO), was to open access to new lands and 
production opportunities, rather than dismantle the traditional 
latifundio system. However, this plan failed to quiet peasant dis- 
content, which by 1965 helped fuel a Castroite guerrilla movement, 
the Movement of the Revolutionary Left (Movimiento de la 
Izquierda Revolucionaria — MIR), led by rebellious Apristas on 
the left who were unhappy with the party's alliance with the coun- 
try's most conservative forces. 

In this context of increasing mobilization and radicalization, 
Belaunde lost his reformist zeal and called on the army to put down 
the guerrilla movement with force. Opting for a more technocratic 
orientation palatable to his urban middle class base, Belaunde, an 
architect and urban planner by training, embarked on a large num- 
ber of construction projects, including irrigation, transportation, 
and housing, while also investing heavily in education. Such in- 
itiatives were made possible, in part, by the economic boost pro- 
vided by the dramatic expansion of the fishmeal industry. Aided 
by new technologies and the abundant fishing grounds off the coast, 
fishmeal production soared. By 1962 Peru became the leading fish- 
ing nation in the world, and fishmeal accounted for fully one- third 
of the country's exports (see Structures of Production, ch. 3). 

Belaunde 's educational expansion dramatically increased the 
number of universities and graduates. But, however laudable, this 
policy tended over time to swell recruits for the growing number 



48 



Municipal election headquarters in the Military 
Geography Institute, Lima, 1966 
Courtesy Paul L. Doughty 

of left-wing parties, as economic opportunities diminished in the 
face of an end, in the late 1960s, of the long cycle of export-led 
economic expansion. Indeed, economic problems spelled trouble 
for Belaunde as he approached the end of his term. Faced with 
a growing balance-of-payments problem, he was forced to devalue 
the sol (for value — see Glossary) in 1967. He also seemed to many 
nationalists to capitulate to foreign capital in a final settlement in 
1968 of a controversial and long-festering dispute with the Inter- 
national Petroleum Company (IPC) over La Brea y Parinas oil 
fields in northern Peru. With public discontent growing, the armed 
forces, led by General Velasco Alvarado, overthrew the Belaunde 
government in 1968 and proceeded to undertake an unexpected 
and unprecedented series of reforms. 

Failed Reform and Economic Decline, 1968-85 

Military Reform from Above, 1968-80 

The military intervention and its reformist orientation repre- 
sented changes both in the armed forces and Peruvian society. 
Within the armed forces, the social origins of the officer corps no 
longer mirrored the background and outlook of the Creole upper 



49 



Peru: A Country Study 

classes, which had historically inclined the officers to follow the man- 
date of the oligarchy. Reflective of the social changes and mobility 
that were occurring in society at large, officers now exhibited 
middle- and lower middle class, provincial, and mestizo or cholo 
(see Glossary) backgrounds. General Velasco, a cholo himself, had 
grown up in humble circumstances in the northern department of 
Piura and purportedly went to school barefoot. 

Moreover, this generation of officers had fought and defeated 
the guerrilla movements in the backward Sierra. In the process, 
they had come to the realization that internal peace in Peru de- 
pended not so much on force of arms, but on implementing struc- 
tural reforms that would relieve the burden of chronic poverty and 
underdevelopment in the region. In short, development, they con- 
cluded, was the best guarantee for national security. The Belaunde 
government had originally held out the promise of reform and de- 
velopment, but had failed. The military attributed that failure, at 
least in part, to flaws in the democratic political system that had 
enabled the opposition to block and stalemate reform initiatives 
in Congress. As nationalists, they also abhorred the proposed pact 
with the IPC and looked askance at stories of widespread corrup- 
tion in the Belaunde government. 

Velasco moved immediately to implement a radical reform pro- 
gram, which seemed, ironically, to embody much of the original 
1931 program of the army's old nemesis, APRA. His first act was 
to expropriate the large agroindustrial plantations along the coast. 
The agrarian reform that followed, the most extensive in Latin 
America outside of Cuba, proceeded to destroy the economic base 
of power of the old ruling classes, the export oligarchy, and its 
gamonal allies in the Sierra. By 1975 half of all arable land had been 
transferred, in the form of various types of cooperatives, to over 
350,000 families comprising about one-fourth of the rural popula- 
tion, mainly estate workers and renters (colonos). Agricultural out- 
put tended to maintain its rather low pre-reform levels, however, 
and the reform still left out an estimated 1 million seasonal work- 
ers and only marginally benefited campesinos in the native com- 
munities (about 40 percent of the rural population). 

The Velasco regime also moved to dismantle the liberal, export 
model of development that had reached its limits after the long post- 
war expansion. The state now assumed, for the first time in his- 
tory, a major role in the development process. Its immediate target 
was the foreign-dominated sector, which during the 1960s had at- 
tained a commanding position in the economy. At the end of the 
Belaunde government in 1968, three-quarters of mining, one-half 
of manufacturing, two-thirds of the commercial banking system, 



50 



Historical Setting 



and one-third of the fishing industry were under direct foreign 
control. 

Velasco reversed this situation. By 1975 state enterprises account- 
ed for more than half of mining output, two- thirds of the banking 
system, a fifth of industrial production, and half of total produc- 
tive investment. Velasco 's overall development strategy was to shift 
from a laissez-faire to a 4 'mixed" economy, to replace export-led 
development with import- substitution industrialization. At the same 
time, the state implemented a series of social measures designed 
to protect workers and redistribute income in order to expand the 
domestic market. 

In the realm of foreign policy, the Velasco regime undertook 
a number of important initiatives. Peru became a driving force not 
only behind the creation of an Andean Pact (see Glossary) in 1969 
to establish a common market with coordinated trade and invest- 
ment policies, but also in the movement of nonaligned countries 
of the Third World. Reflecting a desire to end its perceived de- 
pendency economically and politically on the United States, the 
Velasco government also moved to diversify its foreign relations 
by making trade and aid pacts with the Soviet Union and East Euro- 
pean countries, as well as with Japan and West European nations. 
Finally, Peru succeeded during the 1970s in establishing its inter- 
national claims to a 200-nautical-mile territorial limit in the Pacific 
Ocean. 

By the time Velasco was replaced on August 29, 1975, by the 
more conservative General Francisco Morales Bermudez Cerrutti 
(1975-80), his reform program was already weakening. Natural 
calamities, the world oil embargo of 1973, increasing international 
indebtedness (Velasco had borrowed heavily abroad to replace lost 
investment capital to finance his reforms), over-bureau cratization, 
and general mismanagement had undermined early economic 
growth and triggered a serious inflationary spiral. At the same time, 
Velasco, suffering from terminal cancer, had become increasingly 
personalistic and autocratic, undermining the institutional character 
of military rule. Unwilling to expand his initial popularity through 
party politics, he had created a series of mass organizations, tied 
to the state in typically corporatist (see Glossary) and patrimonialist 
fashion, in order to mobilize support and control the pace of reform. 
However, despite his rhetoric about creating truly popular, demo- 
cratic organizations, he manipulated them from above in an in- 
creasingly arbitrary manner. What had begun as an unusual 
populist type of military experiment evolved into a form of what 
political scientist Guillermo O'Donnell calls "bureaucratic authori- 
tarianism," with increasingly authoritarian and personalistic charac- 
teristics that were manifested in "Velasquismo." 



51 



Peru: A Country Study 



Velasco's replacement, General Morales Bermudez, spent most 
of his term implementing an economic austerity program to stem 
the surge of inflation. Public opinion increasingly turned against 
the rule of the armed forces, which it blamed for the country's eco- 
nomic troubles, widespread corruption, and mismanagement of 
the government, as well as the general excesses of the "revolution." 
Consequently, Morales Bermudez prepared to return the country 
to the democratic process. 

Elections were held in 1978 for a Constituent Assembly empow- 
ered to rewrite the constitution. Although Belaunde's AP boycot- 
ted the election, an array of newly constituted leftist parties won 
an unprecedented 36 percent of the vote, with much of the re- 
mainder going to APRA. The Assembly, under the leadership of 
the aging and terminally ill Haya de la Torre (who would die in 
1980), completed the new document in 1979. Meanwhile, the 
popularity of former president Belaunde underwent a revival. 
Belaunde was decisively reelected president in 1980, with 45 per- 
cent of the vote, for a term of five years. 

Return to Democratic Rule, 1980-85 

Belaunde inherited a country that was vastly different from the 
one he had governed in the 1960s. Gone was the old export oligar- 
chy and its gamonal allies in the Sierra, and the extent of foreign 
investment in the economy had been sharply reduced. In their place, 
Velasco had borrowed enormous sums from foreign banks and so 
expanded the state that by 1980 it accounted for 36 percent of na- 
tional production, double its 1968 share. The informal sector of 
small- and medium-sized businesses outside the legal, formal econ- 
omy had also proliferated. 

By 1980 Belaunde's earlier reforming zeal had substantially 
waned, replaced by a decidedly more conservative orientation to 
government. A team of advisers and technocrats, many with ex- 
perience in international financial organizations, returned home 
to install a neoliberal economic program that emphasized privati- 
zation of state-run business and, once again, export-led growth. 
In an effort to increase agricultural production, which had declined 
as a result of the agrarian reform, Belaunde sharply reduced food 
subsidies, allowing producer prices to rise. 

However, just as Velasco's ambitious reforms of the early 1970s 
were eroded by the 1973 worldwide oil crisis, Belaunde's export 
strategy was shattered by a series of natural calamities and a sharp 
plunge in international commodity prices to their lowest levels since 
the Great Depression. By 1983 production had fallen 12 percent 
and wages 20 percent in real terms while inflation once again surged. 



52 



Juan Velasco Alvarado 
Courtesy, Embassy of Peru, 
Washington 



Francisco Morales 
Bermudez Cerrutti 
Courtesy Embassy of Peru, 
Washington 



Peru: A Country Study 

Unemployment and underemployment was rampant, affecting 
perhaps two-thirds of the work force and causing the minister of 
finance to declare the country in "the worst economic crisis of the 
century." Again, the government opted to borrow heavily in in- 
ternational money markets, after having severely criticized the 
previous regime for ballooning the foreign debt. Peru's total for- 
eign debt swelled from US$9.6 billion in 1980 to US$13 billion 
by the end of Belaunde's term. 

The economic collapse of the early 1980s, continuing the long- 
term cyclical decline begun in the late 1960s, brought into sharp 
focus the country's social deterioration, particularly in the more 
isolated and backward regions of the Sierra. Infant mortality rose 
to 120 per 1,000 births (230 in some remote areas), life expectancy 
for males dropped to 58 compared with 64 in neighboring Chile, 
average daily caloric intake fell below minimum United Nations 
standards, upwards of 60 percent of children under five years of 
age were malnourished, and underemployment and unemployment 
were rampant. Such conditions were a breeding ground for social 
and political discontent, which erupted with a vengeance in 1980 
with the appearance of the Shining Path (Sendero Luminoso — SL). 

Founded in the remote and impoverished department of Aya- 
cucho by Abimael Guzman Reynoso, a philosophy professor at the 
University of Huamanga, the SL blended the ideas of Marxism- 
Leninism, Maoism, and those of Jose Carlos Mariategui, Peru's 
major Marxist theoretician. Taking advantage of the return to 
democratic rule, the deepening economic crisis, the failure of the 
Velasco-era reforms, and a generalized vacuum of authority in parts 
of the Sierra with the collapse of gamonal rule, the SL unleashed 
a virulent and highly effective campaign of terror and subversion 
that caught the Belaunde government by surprise. 

After first choosing to ignore the SL and then relying on an in- 
effective national police response, Belaunde reluctantly turned to 
the army to try to suppress the rebels. However, that proved ex- 
tremely difficult to do. The SL expanded its original base in Aya- 
cucho north along the Andean spine and eventually into Lima and 
other cities, gaining young recruits frustrated by their dismal 
prospects for a better future. To further complicate pacification 
efforts, another rival guerrilla group, the Tupac Amaru Revolu- 
tionary Movement (Movimiento Revolucionario Tupac Amaru — 
MRTA), emerged in Lima. 

Counterinsurgency techniques, often applied indiscriminately 
by the armed forces, resulted in severe human rights violations 
against the civilian population and only created more recruits 
for the SL. By the end of Belaunde's term in 1985, over 6,000 



54 



Historical Setting 



Peruvians had died from the violence, and over US$1 billion in 
property damage had resulted (see Changing Threats to National 
Security, ch. 5). Strongly criticized by international human rights 
organizations, Belaunde nevertheless continued to rely on military 
solutions, rather than other emergency social or developmental 
measures that might have served to get at some of the fundamen- 
tal, underlying socioeconomic causes of the insurgency (see Shin- 
ing Path and Its Impact, ch. 2). 

The severe internal social and political strife, not to mention the 
deteriorating economic conditions, manifested in the Shining Path 
insurgency may have contributed in 1981 to a flare-up of the border 
dispute with Ecuador in the disputed Maranon region. Possibly 
looking to divert public attention away from internal problems, 
both countries began a brief, five-day border skirmish on January 
28, 1981, the eve of the anniversary of the signing of the Protocol 
of Rio de Janeiro (see Glossary) on January 29, 1942. Peruvian 
forces prevailed, and although a ceasefire was quickly declared, 
it did nothing to resolve the two opposing positions on the issue 
of the disputed territory. Essentially, Peru continued to adhere to 
the Rio Protocol by which Ecuador had recognized Peruvian claims. 
On the other hand, Ecuador continued to argue that the Rio Pro- 
tocol should be renegotiated, a position first taken by President 
Jose Velasco Ibarra in 1 960 and adhered to by all subsequent Ecua- 
dorian presidents. 

Along with these internal and external conflicts, Belaunde also 
confronted a rising tide of drug trafficking during his term. Coca 
had been cultivated in the Andes since pre-Columbian times. The 
Inca elite and clergy used it for certain ceremonies, believing that 
it possessed magical powers. After the conquest, coca chewing, 
which suppresses hunger and relieves pain and cold, became com- 
mon among the oppressed indigenous peasantry, who used the drug 
to deal with the hardships imposed by the new colonial regime, 
particularly in the mines. The practice has continued, with an es- 
timated 15 percent of the population chewing coca on a daily basis 
by 1990. 

As a result of widespread cocaine consumption in the United 
States and Europe, demand for coca from the Andes soared dur- 
ing the late 1970s. Peru and Bolivia became the largest coca 
producers in the world, accounting for roughly four-fifths of the 
production in South America. Although originally produced mainly 
in five highland departments, Peruvian production has become in- 
creasingly concentrated in the Upper Huallaga Valley, located some 
379 kilometers northeast of Lima. Peasant growers, some 70,000 
in the valley alone, are estimated to receive upwards of US$240 



55 



Peru: A Country Study 



million annually for their crop from traffickers — mainly Colom- 
bians who oversee the processing, transportation, and smuggling 
operations to foreign countries, principally the United States. 

After the cultivation of coca for narcotics uses was made illegal 
in 1978, efforts to curtail production were intensified by the 
Belaunde government, under pressure from the United States. At- 
tempts were made to substitute other cash crops, and police units 
sought to eradicate the plant. This tactic only served to alienate 
the growers and to set the stage for the spread of the SL move- 
ment into the area in 1983-84 as erstwhile defenders of the grow- 
ers. By 1985 the SL had become an armed presence in the region, 
defending the growers not only from the state, but also from the 
extortionist tactics of the traffickers. The SL, however, became one 
of the wealthiest guerrilla movements in modern history by col- 
lecting an estimated US$30 million in "taxes" from Colombian 
traffickers who controlled the drug trade. 

As the guerrilla war raged on and with the economy in disarray, 
Belaunde had little to show at the end of his term, except perhaps 
the reinstitution of the democratic process. During his term, po- 
litical parties had reemerged across the entire political spectrum 
and vigorously competed to represent their various constituencies. 
With all his problems, Belaunde had also managed to maintain 
press and other freedoms (marred, however, by increasing human 
rights violations) and to observe the parliamentary process. In 1985 
he completed his elected term, only the second time that this had 
happened in forty years. 

After presiding over a free election, Belaunde turned the presi- 
dency over to populist Alan Garcia Perez of APRA who had swept 
to victory with 48 percent of the vote. Belaunde 's own party went 
down to a resounding defeat with only 6 percent of the vote, and 
the Marxist United Left (Izquierda Unida — IU) received 23 per- 
cent. The elections revealed a decided swing to the left by the Peru- 
vian electorate. For APRA Garcia' s victory was the culmination 
of more than half a century of political travail and struggle. 

Peru at the Crossroads 

As Garcia took office on July 28, 1985 — at thirty-six the young- 
est chief executive to assume power in Peru's history — he seemed 
to awaken hope among Peruvians for the future. Although he had 
no previous experience in elected office, he possessed, as his deci- 
sive electoral victory illustrated, the necessary charisma to mobi- 
lize Peruvians to confront their problems. At the same time, the 
governing APRA party won a majority in the new Congress, as- 
suring the new president support for his program to meet the crisis. 



56 



Historical Setting 



The crisis seemed daunting indeed. The foreign debt stood at 
over US$13 billion, real wages had eroded by 30 percent since 1980, 
prices for Peru's exports on the world market remained low, the 
economy was gripped in recession, and guerrilla violence was 
spreading. The future of Peru's fledgling redemocratization now 
hinged on Garcia 's ability to reverse these trends and, at bottom, 
to restore sustained economic growth and development (see The 
Garcia Government, 1985-90, ch. 4). 

* * * 

There are a number of good, general histories of Peru. These 
include Magnus Morner's The Andean Past, David P. Werlich's Peru: 
A Short History, and Michael Reid's Peru: Paths to Poverty. The reader 
should also consult the chapters on Peru in the authoritative, multi- 
volume, Cambridge History of Latin America (CHLA), edited by Leslie 
Bethell. A good general introduction to the colonial period is 
Mark A. Burkholder and Lyman L. Johnson's Colonial Latin Amer- 
ica. The works of John V. Murra are seminal on the pre-Columbian 
period, a good introduction being his chapter "Andean Societies 
Before 1532," in the CHLA. Most useful on the Incas and the 
Conquest are the brilliant works of Nathan Wachtel, The Vision 
of the Vanquished, and John Hemming' s The Conquest of the Incas. A 
powerful account in defense of the native population after conquest 
is Felipe Guaman Poma de Ayala's Letter to a King, while the mes- 
tizo chronicler Garcilaso de la Vega's Royal Commentaries of the In- 
cas and General History of Peru constitutes the first truly Peruvian vision 
of the Andes. Particularly incisive works on the colonial system 
are Karen Spalding's Huarochiri: An Andean Society under Inca and 
Spanish Rule and Steve J. Stern's Peru's Indian Peoples and the Challenge 
of Spanish Conquest. 

The postindependence period has received innovative treatment 
in Paul E. Gootenberg's Between Silver and Guano and Nils P. Jacob- 
sen's Mirages of Transition. Rosemary Thorp and Geoffrey Bertram's 
Peru 1890-1977 is the standard source on twentieth-century eco- 
nomic development. Richard C. Webb and Graciela Fernandez 
Baca de Valdez's Peru en numeros provides important statistics on 
twentieth-century Peru. Four chapters in the CHLA cover the 
period since 1821: Heraclio Bonilla's "Peru and Bolivia," Peter F. 
Klaren's "Origins of Modern Peru, 1880-1930," Geoffrey Ber- 
tram's "Peru: 1930-1962," and Julio Coder's "Peru since 1960." 
Incisive analyses on APR A can be found in Klaren's Moderniza- 
tion, Dislocation, and Aprismo, Steve Stein's Populism in Peru, and 
Fredrick B. Pike's The Politics of the Miraculous in Peru. Relations 



57 



Peru: A Country Study 



with the United States are surveyed adroitly by Pike in The United 
States and the Andean Republics. The military revolution of 1968 
receives important attention from Cynthia McClintock and Abra- 
ham F. Lowenthal (eds.) in The Peruvian Experiment Reconsidered and 
in Alfred Stepan's The State and Society. The crisis of the early 1980s 
is analyzed by Jose Matos Mar's Un desborde popular. (For further 
information and complete citations, see Bibliography.) 



58 



Chapter 2. The Society and Its Environment 




Mochican ceremonial gold mask 



PERUVIANNESS (PERUANIDAD) has often been debated by 
Peruvian authors who evoke patriotism, faith, cultural mystique, 
and other allegedly intrinsic qualities of nationality. Peru, however, 
is not to be characterized as a homogeneous culture, nor its peo- 
ple as one people. Peruvians speak of their differences with cer- 
tainty, referring to lo criollo ("of the Creole"), lo serrano ("of the 
highlander"), and other special traits by which social groups and 
regions are stereotyped. The national Creole identity incorporates 
a combination of unique associations and ways of doing things a 
la criolla. 

The dominant national culture emanating from Lima is urban, 
bureaucratic, street-oriented, and fast-paced. Yet the identity that 
goes with being a limeno (a Limean) is also profoundly provincial 
in its own way. In the first half of the twentieth century, the Lima 
cultural character transcended class values and ranks and to a sig- 
nificant degree was identified as the national Peruvian culture. The 
great migrations from 1950 to 1990 altered that personality sub- 
stantially. By 1991 the national character, dominated by the urban 
style of Lima, was complicated by millions of highlanders (serranos), 
whose rural Spanish contrasts with the fast slurring and slang of 
the Lima dialect. Highland music is heard constantly on more than 
a dozen Lima radio stations that exalt the regional cultures, give 
announcements in Quechua, and relentlessly advertise the new busi- 
nesses of the migrant entrepreneurs. The places mentioned and 
the activities announced are in greater Lima, but unknown to the 
limeno. The new limeno, while acquiring Creole traits, nevertheless 
presents another face, one with which the Lima native does not 
closely relate and does not understand because few true limenos ac- 
tually visit the provinces, much less stay there to live. Nor do they 
visit the sprawling "young towns" (pueblos jovenes — see Glossary) 
of squatters that are disdained or even feared. Urban Hispanic Peru- 
vians have always been caught in the bind of contradiction, at once 
claiming the glory of the Inca past while refusing to accept its descen- 
dants or their traditions as legitimately belonging in the modern 
state. In the early 1990s, however, this change was taking place, 
desired or not. 

Events have been forcing the alteration of traditions in both the 
coast (Costa) and highlands (Sierra) in a process that would again 
transform the country, as did both conquest and independence. 
The peoples of the Altiplano and valleys of the Andean heartland — 



61 



Peru: A Country Study 

long exploited and neglected and driven both by real needs and 
the quest for respect and equity — have surged over the country in 
a "reconquest" of Peru, stamping it with their image. 

For respect and equity to develop, the white and mestizo (see 
Glossary) elites will have to yield the social and economic space 
for change and reconcile themselves to institutional changes that 
provide fairness in life opportunities. Up to 1991, the serranos had 
seized that space from a reluctant nation by aggressive migration, 
establishing vast squatter settlements and pushing hard against the 
walls of power. As with the Agrarian Reform Law of 1969, the 
elites and special interests that benefited from traditional socio- 
economic arrangements had protected these old ways with few 
concessions to wider public and national needs. For the cholo (see 
Glossary), Peru's generic "everyman," to gain a place of respect, 
well-being, and a sense of progress will be a test of endurance, ex- 
periment, and sacrifice as painful and difficult as any in the 
hemisphere. With the agony of terroristic and revengeful revolu- 
tion perpetrated by the Shining Path (Sendero Luminoso — SL) and 
the Tupac Amaru Revolutionary Movement (Movimiento Revolu- 
cionario Tupac Amaru — MRTA), on the one hand, and the chaotic 
collapse of the institutional formal economy, on the other, aver- 
age Peruvians from all social groups were caught between the 
proverbial "sword and wall." 

Just as the highland migration to the urban coast was the major 
avenue for social change through the 1980s, increasing numbers 
of Peruvians sought to continue this journey away from the dilem- 
mas of their homeland by moving to other countries. About 700,000 
had emigrated by 1991, with over 40 percent going to the United 
States. Catholic University of Peru professor Teofilo Altamirano 
has documented the new currents of mobility that went from Lima, 
Junm, and Ancash to every state in the United States, with heavi- 
est concentrations in New Jersey, New York, California, and 
Florida. In 1990 about 300,000 of Altamirano's compatriots 
(paisanos) lived — either legally or not — in the United States. 

In the early 1990s, Peru's identity as a nation and people was 
becoming more complex and cosmopolitan, while the distinctive 
traits of the culture were being broadened, disseminated, and shared 
by an increasingly wider group of citizens. The crosscurrents to 
these trends were configured around the struggle for retention and 
status of the native cultures: the Quechua, the Aymara, and the 
many tribal societies of Amazonia. Whereas tens of thousands 
deliberately embarked on life-plans of social mobility by altering 
their persona from indio (Indian) to cholo to mestizo in moving from 



62 



The Society and Its Environment 



the native American caste to upper-middle class, a new alterna- 
tive for some was to use ethnic loyalty and identity as a device of 
empowerment and, thus, an avenue for socioeconomic change. How 
Peruvian institutions, state policy, and traditions adjusted to these 
trends would determine what Peruvians as a society would be like 
in the twenty-first century. 

Environment and Population 
Natural Systems and Human Life 

Peru is a complex amalgam of ancient and modern cultures, 
populations, conflicts, questions, and dilemmas. The land itself 
offers great challenges. With 1,285,216 square kilometers, Peru 
is the nineteenth largest nation in area in the world and the fourth 
largest Latin American nation. It ranked fifth in population in the 
region, with 22,767,543 inhabitants in July 1992. Centered in the 
heart of the 8,900-kilometer-long Andean range, Peru's geogra- 
phy and climates, although similar to those of its Andean neigh- 
bors, form their own peculiar conditions, making the region one 
of the world's most heterogeneous and dynamic. Peru's principal 
natural features are its desert coast; the forty great snow-covered 
peaks over 6,000 meters in altitude, and the mountain ranges they 
anchor; Lake Titicaca, which is shared with Bolivia, and at 3,809 
meters above sea level the world's highest navigable lake; and the 
vast web of tropical rivers like the Ucayali, Maranon, and Huallaga, 
which join to form the Rio Amazonas (the Amazon) above Peru's 
"Atlantic" port of Iquitos (see fig. 5). 

The Costa, Sierra, and Selva (selva — jungle), each comprising 
a different and sharply contrasting environment, form the major 
terrestrial regions of the country. Each area, however, contains spe- 
cial ecological niches and microclimates generated by ocean cur- 
rents, the wide range of Andean altitudes, solar angles and slopes, 
and the configurations of the vast Amazonian area. As a conse- 
quence of these complexities, thirty-four ecological subregions have 
been identified. 

Although there is great diversity in native fauna, relatively few 
animals lent themselves to the process of domestication in prehistoric 
times. Consequently, at the time of European arrival the only large 
domesticated animals were the llamas and alpacas. Unfortunately, 
llamas and alpacas are not powerful beasts, serving only as light 
pack animals and for meat and wool. The absence of great draft 
animals played a key role in the evolution of human societies in 
Peru because without animals such as horses, oxen, camels, and 
donkeys, which powered the wheels of development in the Old 



63 



Peru: A Country Study 

World, human energy in Peru and elsewhere in the Americas could 
not be augmented significantly. As far as is known, the enormous 
potential in hydrologic resources in preconquest times was tapped 
only for agricultural irrigation and basic domestic usage. Through 
the elaborate use of massive irrigation works and terracing, which 
appeared in both highland and coastal valleys in pre-Chavfn peri- 
ods (1000 B.C.), the environment of the Andes was opened for 
intensive human settlement, population growth, and the emergence 
of regional states. 

The development of Andean agriculture started about 9,000 years 
ago, when inhabitants began experimenting with the rich vegeta- 
tion they utilized as food gatherers. Each ecological niche, or 
"floor," begins about 500 to 1 ,000 meters vertically above the last, 
forming a minutely graduated and specialized environment for life. 
The central Andean area is, thus, one of the world's most com- 
plex biospheres, which human efforts made into one of the impor- 
tant prehistoric centers of plant domestication. Native domesticated 
plants number in the hundreds and include many varieties of such 
important crops as potatoes, maize (corn), lima beans, peppers, 
yucca or manioc, cotton, squashes and gourds, pineapples, avocado, 
and coca, which were unknown in the Old World. Dozens of vari- 
eties of fruits and other products, despite their attractive qualities, 
are little known outside the Andean region. 

Conquest of the Aztec alliance in Mexico and the Inca Empire 
(Tawantinsuyu) in the Andes gave impetus to one of the most im- 
portant features of the colonial process, the transfer of wealth, 
products, and disease between the hemispheres. Andean plant 
resources, of course, contributed significantly to life in Europe, 
Africa, and Asia. Although attention has usually focused on the 
hoards of Inca gold and silver shipped to Spain and thus funneled 
to the rest of Europe, the value of Andean potatoes to the Euro- 
pean economy and diet probably far exceeded that of precious 
metals. By the same token, the Spanish conquerors introduced into 
the New World wheat, barley, rice, and other grains; vegetables 
like carrots; sugarcane; tea and coffee; and many fruits, such as 
grapes, oranges, and olives. The addition of Old World cattie, hogs, 
sheep, goats, chickens, and draft animals — horses, donkeys, and 
oxen — vastiy increased Andean resources and altered work meth- 
ods, diets, and health. The trade-off in terms of disease was one- 
sided; measles, malaria, yellow fever, cholera, whooping cough, 
influenza, smallpox, and bubonic plague, carried by rats, arrived 
with each ship from Europe. The impact of these diseases was more 
devastating than any other aspect of the conquest, and they re- 
main major scourges for the majority of Peruvians. 



64 




— International bound 

® National capital 

c Populated place 

A Spot elevation in mi 

COSTA Geographic region 



50 100 20 

-L 



50 100 200Kilomet< 



Figure 5. Topography and Drainagt 
66 



The Society and Its Environment 



The Coastal Region 

Peru's coast is a bleak, often rocky, and mountainous desert that 
runs from Chile to Ecuador, punctuated by fifty-two small rivers 
that descend through steep, arid mountains and empty into the 
Pacific. The Costa is a strange land of great dunes and rolling ex- 
panses of barren sand, at once a desert but with periods of hu- 
midity as high as 90 percent from June to September, when tem- 
peratures in Lima average about 16 degrees Celsius. Temperatures 
along the coast rise near the equator in the north, where the sum- 
mer can be blazingly hot, and fall to cooler levels in the south. If 
climatic conditions are right, there can be a sudden burst of deli- 
cate plant life at certain places on the lunar-like landscape, made 
possible by the heavy mist. Normally, however, the mist is only 
sufficient to dampen the air, and the sand remains bleakly sterile. 
These conditions greatly favor the preservation of delicate archaeo- 
logical remains. The environment also facilitates human habita- 
tion and housing because the climate is tolerable and the lack of 
rain eases the need for water-tight roofing. 

Humans have lived for over 10,000 years in the larger coastal 
valleys, fishing, hunting, and gathering along the rich shoreline, 
as well as domesticating crops and inventing irrigation systems. 
The largest of these littoral oases became the sites of towns, cities, 
religious centers, and the seats of ancient nations. Although migra- 
tion from the highlands and other provincial regions has long oc- 
curred, the movement of people to the Costa was greatiy stimulated 
by the growth of the fishing industry, which transformed villages 
and towns into frontier-like cities, such as Chimbote. In the early 
1990s, over 53 percent of the nation's people lived in these sharply 
delimited coastal valleys (see table 4, Appendix). As the popula- 
tion becomes ever more concentrated in the coastal urban centers, 
people increasingly overrun the rich and ancient irrigated agricul- 
tural lands, such as those in the Rfmac Valley where greater Lima 
is situated, and the Chicama Valley at the site of the city of Trujillo. 
Although the region contains 160,500 square kilometers of land 
area, only 4 percent, or 6,900 square kilometers of it, is arable. 
By 1990 population growth had increased the density of habita- 
tion to 1,715 persons for each square kilometer of arable land (see 
table 5, Appendix). Throughout all the coastal valleys, human set- 
tlements remain totally dependent on the waters that flow from 
the Andes along canals and aqueducts first designed and built 3,000 
years ago. Here, uncontrolled and unplanned urban growth com- 
petes directly with scarce and vitally needed agricultural land, stead- 
ily removing it from productive use. 



67 



Peru: A Country Study 



The Andean Highlands 

The Sierra is the commanding feature of Peru's territory, reach- 
ing heights up to 6,768 meters. Hundreds of permanently glaci- 
ated and snowcapped peaks tower over the valleys. The steep, 
desiccated Pacific flank of the Andes supports only a sparse popu- 
lation in villages located at infrequent springs and seepages. In con- 
trast, tropical forests blanket the eastern side of the Andes as high 
as 2,100 meters. Between these extremes, in the shadows of the 
great snowpeaks, lie the most populous highland ecological zones: 
the intermontane valleys (kichwd) and the higher uplands and grassy 
puna or Altiplano plateaus. Approximately 36 percent of the popu- 
lation lives in thousands of small villages and hamlets that consti- 
tute the rural hinterland for the regional capitals and trading centers. 
More than 15 percent of Peruvians live at altitudes between 2,000 
and 3,000 meters, 20 percent live between 3,000 and 4,000 meters, 
and 1 percent regularly reside at altitudes over 4,000 meters. 

Although rich in mineral resources, such as copper, lead, sil- 
ver, iron, and zinc, which are mined at altitudes as high as 5,152 
meters, the Andes are endowed with limited usable land. The high- 
lands encompass 34 percent of the national territory, or 437,000 
square kilometers, but only 4.5 percent of the highlands, or 19,665 
square kilometers, is arable and cultivated. Nevertheless, this area 
constitutes more than half the nation's productive land. About 
93,120 square kilometers of the Sierra is natural pasture over 4,000 
meters in altitude, too high for agriculture. The 4.5 percent of arable 
land, therefore, has fairly dense populations, particularly in Puno, 
Cajamarca, and in valleys such as the Mantaro in Junm Depart- 
ment and Callejon de Huaylas in Ancash Department. The high- 
land provinces have a population density of 460 persons per square 
kilometer of habitable, arable land. 

The best areas for cultivation are the valleys, which range from 
2,000 to 3,500 meters in altitude. Although many valleys have lim- 
ited water supplies, others, because of glacial runoffs, enjoy abun- 
dant water for irrigation. In the protected valleys, the dry climate 
is temperate, with no frost or great heat. In the high plateau or 
puna regions above 3,900 meters, the climate is cold and severe, 
often going below freezing at night and seldom rising above 16°C 
by day. A myriad of native tubers thrives at altitudes from 2,800 
meters to almost 4,000 meters, including over 4,000 known varie- 
ties of the potato, oca, and olluco, as well as grains such as quinoa. 
The hardy native llamas and alpacas thrive on the tough ichu grass 
of the punas; European sheep and cattle, when adapted, do well 
at lesser altitudes. 



68 



A view of Huaraz and the Cordillera Blanca 
Courtesy Inter-American Development Bank 

For the Peruvians, there are two basic Andean seasons, the rainy 
season, locally referred to as winter (invierno), from October through 
April and the dry season of summer (verano) in the remaining 
months. Crops are harvested according to type throughout the year, 
with potatoes and other native tubers brought in during the mid- 
dle to late winter and grains during the dry season. The torrential 
rains of the winter months frequently cause severe landslides and 
avalanches, called huaycos, throughout the Andean region, damaging 
irrigation canals, roads, and even destroying villages and cities. 
In the valley of Callejon de Huaylas, the city of Huaraz (Huaras) 
was partially destroyed in 1941 by just such a catastrophe, an event 
repeated a few kilometers away in 1962, when the town of Ranra- 
hirca was annihilated by a huayco that killed about 3,000 people. 

The formidable terrain of the Andes, where the land may fall 
away from 5,000 meters to 500 meters and then rise to almost 7,000 
meters in a space of 50 kilometers as the condor flies, poses a ubiqui- 
tous challenge to any modern means of transport. Thus, the Andean 
region was not penetrated by wheeled vehicles until railroads were 
built in the latter half of the nineteenth century. Moreover, most 
of the nation did not see wheels until the dirt road system was under 
construction in the 1920s. To build the system, President Au gusto 
B. Legufa y Salcedo (1908-12, 1919-30) revived a national system 



69 



Peru: A Country Study 

of draft labor harkening back to the Inca's conscripted labor force, 
or mita (see Glossary), used for road and bridge building in an- 
cient times. 

High -A Ititude A dapta Hons 

As with the Himalayan mountains, the Andes impose severe con- 
ditions and many limitations on life. Consequently, Andean peo- 
ple are physically adapted to the heights in special ways. In contrast 
to persons born and raised at sea level, those living at Andean al- 
titudes 2,500 meters or more above sea level have as much as 25 
percent more blood that is more viscous and richer in red cells, 
a heart that is proportionately larger, and specially adapted, larger 
lungs, with an enhanced capacity to take in oxygen from the rare 
atmosphere. Biological adaptations have permitted the native high- 
landers to work efficiently and survive successfully in the Andean 
altitudes for 20,000 years. 

The first important scientific research on high-altitude biology 
was undertaken by the Peruvian physician-scientist Carlos Monge 
Medrano in the 1920s. He showed that coca-leaf chewing played 
a role in aiding the metabolism in high-altitude populations. More 
recent studies have shown that coca chewing significantly aids in 
metabolizing high carbohydrate foods like potatoes, yucca, and 
corn, which are traditional staples in the Andean region, thus 
providing the chewer with more rapid energy input from his meals. 
Supposed narcotic effects of coca-leaf chewing are nil because en- 
zymes in the mouth convert coca into atropine-like substances, un- 
like substances involved in cocaine. Anthropologists Catherine Allen 
and Roderick E. Burchard have also demonstrated the central role 
traditional coca use plays in Andean communities as a medicine, 
ritual substance, and an element in economic and social affairs. 

The Amazonian Tropics 

The Selva, which includes the humid tropics of the Amazon jun- 
gle and rivers, covers about 63 percent of Peru but contains only 
about 11 percent of the country's population. The region begins 
high in the eastern Andean cloud forests, called the ceja de montaha 
(eyebrow of the jungle), or Montana or Selva Alta, and descends 
with the rush of silt-laden Andean rivers — such as the Maranon, 
Huallaga, Apurimac, and Urubamba — to the relatively flat, densely 
forested, Amazonian plain. These torrential rivers unite as they 
flow, forming the Amazon before reaching the burgeoning city of 
Iquitos. Regarded as an exotic land of mystery and promise 
throughout much of the twentieth century, the Selva has been seen 
in Peru as the great hope for future development, wealth, and the 



70 



The Society and Its Environment 



fulfillment of national destiny. As such, it became President 
Fernando Belaunde Terry's "Holy Grail" as he devoted the ener- 
gies of his two administrations (1963-68, 1980-85) to promoting 
colonization, development schemes, and highway construction 
across the Montana and into the tropical domain. 

Human setdements in the Amazonian region are invariably river- 
ine, clustering at the edges of the hundreds of rivers and oxbow 
lakes that in natural conditions are virtual fish farms in terms of 
their productivity. The streams and rivers constitute a serpentine 
network of pathways plied by boats and canoes that provide the 
basic transport through the forest. Here, the Shipibo, Ashaninka 
(Campa), Aguaruna, and other tribes lived in relative indepen- 
dence from the Peruvian state until the mid- twentieth century. 
Although the native people have cleverly exploited the extraordi- 
nary riverine environment for at least 5,000 years, both they and 
the natural system have been under relentless pressures of popula- 
tion, extractive industries, and the conversion of forest into farm 
and pasture. Amazonian forest resources are enormous but not in- 
exhaustible. Amazonian timber is prized worldwide, but when the 
great cedar, rosewood, and mahogany reserves are cut, they are 
rarely replaced. 

Peru's tropics are also a fabled source for traditional medicinal 
plants, such as the four types of domesticated coca, which are prized 
through the entire Andean and upper Amazonian sphere, having 
been widely traded and bartered for 4,500 years. Unfortunately, 
coca's traditional uses as a beneficial drug for dietary, medical, 
and ritual purposes, and, in the early twentieth century, as a pri- 
mary flavoring for cola drinks have given way to illegal plantings 
on a large scale for cocaine production. All of the new, illegal plan- 
tations are located in Peru's upper Amazon drainage and have seri- 
ously deteriorated the forests, soils, and general environment where 
they exist. The use of chemical sprays and the widespread clear- 
ing of vegetation to eliminate illegal planting has also created un- 
fortunate and extensive environmental side-effects. 

In the early 1990s, the Selva was still considered an important 
potential source for new discoveries in the medicinal, fuel, and 
mineral fields. Petroleum and gas reserves have been known to exist 
in several areas, but remained difficult to exploit. And, in Peru's 
southern Amazonian department of Madre de Dios, a gold rush 
has been in progress since the 1970s, producing a frontier boom 
effect with various negative repercussions. The new population at- 
tracted to the region has placed numerous pressures on the native 
tribal communities and their lands. 



71 



Peru: A Country Study 



All of these intrusions into the fragile Amazon tropics were 
fraught with environmental questions and human dilemmas of 
major scale. In this poorly understood environment, hopes and de- 
velopment programs have often gone awry at enormous cost. In 
their wake, serious problems of deforestation, population displace- 
ment, challenge to the tribal rights of the native "keepers of the 
forest," endless infrastructural costs, and the explosive expansion 
of cocaine capitalism have emerged. In the 1963-90 period, Peru 
looked to the tropics as the solution for socioeconomic problems 
that it did not want to confront in the highlands. In the early 1990s, 
it was faced with paradox and quandary in both areas. 

The Maritime Region 

A maritime region constitutes a fourth significant environment 
within the Peruvian domain. The waters off the Peruvian coast 
are swept by the Humboldt (or Peruvian) Current that rises in the 
frigid Antarctic and runs strongly northward, cooling the arid South 
American coastline before curving into the central Pacific near the 
Peru-Ecuador border. Vast shoals of anchovy, tuna, and several 
varieties of other valued fish are carried in this stream, making 
it one of the world's richest commercial fisheries (see Structures 
of Production, ch. 3). The importance of guano has diminished 
since the rise of the anchovy fishing industry. The billions of an- 
chovy trapped by modern flotillas of purse seiners guided by spot- 
ter planes and electronic sounding devices are turned into fish meal 
for fertilizer and numerous other industrial uses. Exports of fish 
meal and fish products are of critical importance for Peru's econ- 
omy. For this reason, changes in the environmental patterns on 
the coast or in the adjacent ocean have devastating consequences 
for employment and, therefore, national stability. The periodic ad- 
vent of a warm current flowing south, known as El Nino (The 
Christ-child), and intensive fishing that has temporarily depleted 
the seemingly boundless stocks of anchovy have caused major 
difficulties for Peru. 

Natural Disasters and Their Impact 

Severely affecting conditions on both land and sea, El Nino is 
yet another peculiarity of the Peruvian environment. This stream 
of equatorial water periodically forces its way southward against 
the shoreline, pushing the cold Humboldt Current and its vast fish- 
ery deeper and westward into the ocean, while bringing in exotic 
equatorial species. El Nino is not benign, even though named after 
the Christ-child because it has often appeared in December. In- 
stead, over cycles of fifteen to twenty-five years, El Nino disrupts 



72 



The Society and Its Environment 



the normally rainless coastal climate and produces heavy rainfalls, 
floods, and consequent damages. The reverse occurs in the high- 
lands, where drought-like conditions occur, often over two-to-five- 
year periods, reducing agricultural production. The impact of this 
phenomenon came to be more fully understood only in the 1980s, 
and it has been shown to influence Atlantic hurricane patterns as 
well. Moreover, archaeological research by Michael Edward 
Moseley has demonstrated that El Nino turbulence probably led 
to the heretofore unexplained collapses of apparently prosperous 
ancient Andean societies. From 1981 to 1984, Peruvians experi- 
enced severe destruction from this perturbation; the destruction 
clearly contributed to the rapidly deteriorating socioeconomic con- 
ditions in the country. 

Another major environmental variable is the activity of the Nazca 
plate, which abuts Peru along the Pacific shore and constantiy forces 
the continental land mass upward. Although volcanism created 
numerous thermal springs throughout the coastal and highland 
region and created such striking volcanic cones as El Misti, which 
overlooks the city of Arequipa, it also poses the constant threat of 
severe earthquakes. 

In the Sierra, much farmland rests at the foot of great, unstable 
mountains, such as those overlooking the spectacular valley of Calle- 
jon de Huaylas, which is replete with the evidence of past avalanches 
and seismic upheaval. It is also one of the most productive agricul- 
tural areas in the highlands. On May 31 , 1970, an earthquake mea- 
suring 7 . 7 on the Richter scale staggered the department of Ancash 
and adjacent areas. A block of glacial ice split from the top of El 
Huascaran, Peru's tallest mountain (6,768 meters), and buried the 
provincial capital of Yungay under a blanket of mud and rock, kill- 
ing about 5,000 people. In the affected region, 70,000 persons were 
killed, 140,000 injured, and over 500,000 left homeless. It was the 
most destructive disaster in the history of the Western Hemisphere 
and had major negative effects on the national economy and govern- 
ment reform programs at a critical moment during the adminis- 
tration of Juan Velasco Alvarado (1968-75). 

In precolonial times, the Incas and their ancestors had long grap- 
pled with the seismic problem. Many archaeologists have attributed 
the special trapezoidal character of Inca architecture to precautions 
against earthquakes. The first name of the founder of the Inca em- 
pire, Pachacuti Inca Yupanqui, means "cataclysm." The Incas 
understood their terrain. Since 1568 there have been over 70 sig- 
nificant earthquakes in Peru, or one every six years, although each 
year the country registers as many as 200 lesser quakes. As an ex- 
pression of their own powerlessness in the face of such events, many 



73 



Peru: A Country Study 

Peruvians pray for protection to a series of earthquake saints. 
Among such saints are Cusco's Senor de los Temblores (Lord of 
the Tremors), revered since a disaster in 1650, and the Senor de 
los Milagros (Lord of Miracles), worshipped in Lima and nation- 
wide since a quake in 1655. 

People, Property, and Farming Systems 

Human adaptation to the high altitudes, coastal desert, and trop- 
ical jungles requires specialized knowledge and skill in addition to 
the physiological adjustments noted to cope with altitudinal stress. 
Over the course of thousands of years, people invented elaborate 
irrigation systems to take advantage of the potential productivity 
in the coastal valleys. Visitors to even the smallest coastal valleys 
can still find elaborate evidence of these ancient public works. Many 
of these networks are still in use or form the basis of rebuilt sys- 
tems that provide water to the lucrative commercial agriculture now 
practiced. Both in prehistoric times and now, the key to social and 
political affairs in these and all other coastal valleys is access to water, 
effective irrigation technology, and the ability to keep a large labor 
force at the task of construction and maintenance. 

The coastal valleys from colonial times to the present have been 
dominated by extensive systems of plantation agriculture, with 
powerful elite families in control of the land and water rights. The 
principal crops harvested under these regimes are sugarcane and 
cotton, with a mixture of other crops, such as grapes and citrus, 
also being planted. Before the Agrarian Reform Law of 1969, about 
80 percent of the arable coastal land was owned by 1.7 percent of 
the property owners. Despite the dominance of the great coastal 
estates, there were, and still are, thousands of smaller farms sur- 
rounding them, producing a wide variety of food crops for the urban 
markets and for subsistence. Since land reform, ownership of the 
great plantations has been transferred to the employees and work- 
ers, who operate them as a type of cooperative. The coastal farm- 
land is extremely valuable because of the generous climate, flat 
lands, and usually reliable irrigation waters, without which noth- 
ing would succeed. These advantageous conditions are supple- 
mented by the use of excellent guano and fish-meal fertilizers. As 
a result, the productive coastal land, amounting to only 3.8 per- 
cent of the national total, including pasture and forest, yields a 
reported 50 percent of the gross agricultural product. 

In the intermontane Andean valleys, there is a wide variety of 
farming opportunities. The best lands are those that benefit year 
round from the constant flow of melting glacial waters. Most farm- 
ing depends on the advent of the rains, and farmers must plan their 



74 





Destruction from the earthquake of May 31, 1970, in Ancash Department 

Courtesy Inter-American Development Bank 
Remnants of Yungay, Callejon de Huaylas Valley, buried by the 1970 ice 

avalanche from El Huascardn 
Courtesy Paul L. Doughty 



75 



Peru: A Country Study 

affairs accordingly. In many areas, farmers have built reservoir 
and canal systems, but, for the most part, they must time their 
planting to coincide with the capricious onset of the rainy season. 
Where irrigation works are operative, as on the coast, farmers are 
joined in water-management districts and irrigation boards, which 
govern water flow, canal maintenance, and enforcement of com- 
plex water rights, rules, and customs. 

Over 70 percent of the smallest farms are less than five hectares 
in size, with the great majority of them found in the Andean high- 
lands. A typical peasant household with such a small property can- 
not harvest anything but the most minimum subsistence from it 
and inevitably must supplement household earnings from other 
sources, with most or all family members working. The adequacy 
of each small farm and its dispersed chacras (plots of land used for 
gardening) of course varies with water supply, altitude, soil fertil- 
ity, and other local factors. The best irrigated farmland in the kichwa 
valleys tends to be highly subdivided in the competition for a rural 
subsistence base. The largest land holdings are the property of cor- 
porate communities, such as the numerous Peasant Communities 
(Comunidades Campesinas) and Peasant Groups (Grupos Cam- 
pesinos). In 1990 these official forms of common entitlement, as 
opposed to individual private ownership, accounted for over 60 per- 
cent of pasture lands, much of which lies in the punas of the southern 
Andes. 

The ecological mandates of the Andean environment thus struc- 
ture the day-to-day farming activities of all highlanders and the 
character of their domestic economies. Research conducted by an- 
thropologist Stephen B. Brush showed how peasant farmers tradi- 
tionally have utilized the different ecological niches at their disposal. 
At the highest altitudes of production, animals are grazed and 
specialized tubers grown. At the intermediate altitudes are found 
grains like wheat, barley, rye, and corn, as well as pulses such as 
broad beans, peas, and lentils, along with a wide variety of vegeta- 
bles, including onions, squashes, carrots, hot rocoto peppers, and 
tomatoes. At still lower levels, tropical fruits and crops prosper. 

Some communities have direct access to all of these production 
environments, whereas others may be confined to one zone only. 
Traditionally, the strategy of families, the basic social units of 
production and consumption, is to arrange access to products from 
the different zones through the social mechanisms available to them. 
Particular chacras serve as virtual chess pieces as families buy and 
sell property, or enter into sharecropping arrangements in order 
to obtain access to specific cropping areas. Marital arrangements 
may also be made with specific properties in mind. Thus, the system 



76 



Ichu, an Aymara village above Lake Titicaca 
Courtesy Paul L. Doughty 

of small farms {minifundios — see Glossary) will invariably involve 
a confusing but systematic pattern of holdings. 

In Huaylas, Ancash Department, for example, farmers owning 
small but highly productive irrigated chacras at about 2,700 meters 
cultivate corn, vegetables, and alfalfa. Slightly higher irrigated 
property is devoted to grains, and, higher still, chacras are devoted 
to potatoes, oca and other tubers, and quinoa. Above the culti- 
vated land and on the nonirri gated hillsides, cattle and sheep are 
grazed on communally held open ranges and puna. In the deep 
protected gorges and canyons on the fringes of the district, small 
chacras at altitudes of 1,500 meters produce a variety of tropical 
crops. Consequently, within a relatively small area a single family 
may own or have usufruct rights to a checkerboard of small chacras, 
whose total area does not exceed four or five hectares, but whose 
range of production provides a diverse nutritional subsistence base. 

For this reason, attempts to unify smallholdings to make them 
more efficient can likely yield the opposite effect in terms of the house- 
hold economy. This is, in fact, what happened in many areas after 
the Agrarian Reform Law of 1969 was implemented, prohibiting 
sharecropping and restricting the geographical range of ownership 
in order to achieve hoped for economies of scale (see Glossary). After 
the initial attempts to enforce the new, well-meaning laws, the 



77 



Peru: A Country Study 



minifundio system began to reemerge as peasants discovered ways 
to circumvent its restrictions, which inadvertently limited their 
ownership and use of chacras to a narrow range of ecological zones 
(see Structures of Production, ch. 3). 

In other areas, such as those described by anthropologist Enrique 
Mayer in the Huanuco region, the relatively compressed ecology 
found in Huaylas gives way to one spread out over the eastern flanks 
of the Andes, stretching down eventually to the Selva. In contrast 
to the confining peasant farms of Huaylas, farmers in the Huanuco 
region develop barter and trade relations across the production 
zones, permitting them to exchange their farm produce, such as 
potatoes, for other crops grown at different levels. 

Although most Andean farmers are independent producers, there 
are various types of large holdings, of which three are particularly 
important: the manorial estate, the minifundio and family farm, and 
the corporate community holding. Historically, the most signifi- 
cant holdings relative to socioeconomic power were the great 
manorial properties known as haciendas, which averaged over 1,200 
hectares in size but often exceeded 20,000 hectares prior to being 
eliminated during the 1969-75 land reform. At the time the land 
reform began, 1.3 percent of the highland farm owners held over 
75 percent of the farm and grazing lands, while 96 percent of the 
farmers held ownership of but 8.5 percent of the farm area. The 
corporate community holdings are in the form of land held in com- 
mon title by a Peasant Community. After the land reform, groups 
of communities were organized as corporate bodies by the govern- 
ment to enable them, in theory, to combine lands and resources 
to gain the advantages of an economy of scale. These organiza- 
tions and the Peasant Communities, reportedly numbering 5,500 
in 1991, assumed titles to the haciendas expropriated during the 
reform period. 

By contrast, the population living in the Selva is engaged in a 
totally different set of agroecological patterns of activity. The na- 
tive peoples of the tropics, living in riverine settings for the greater 
part, depend on fishing, hunting, and selective gathering from the 
forest. They also engage in highly effective horticulture, usually 
in a system known as slash-and-burn (see Glossary). Long thought 
to be a destructive and inefficient method of farming, studies have 
revealed it to be quite the contrary. In this system, the tribal farmer 
usually exploits a particular plot for only a three-to-five-year period 
and then abandons it to open another fresh area. This practice al- 
lows the vegetation and thin soil to recuperate before the farmer 
returns to use it again in ten to twenty years. Another facet of the 
system is that all fields are used in a pattern of multicropping. In 



78 



The Society and Its Environment 



this approach, as many as fifteen different crops are intermingled 
in such a way that each plant complements the others in terms of 
nutrients used or returned to the soil. The arrangement also pro- 
vides a disadvantageous environment for plant diseases and insect 
pests. Another common horticultural system employed along the 
river banks in the dry season takes advantage of extensive silt 
deposits left by the seasonal floods. On such open plots, farmers 
tend to monocrop or, at least, to reduce the number of varieties 
sown. 

Human Settlement and Population Through Time 

The special configuration and character of Peru's modern soci- 
ety owe their start to the Spanish conquest, when Europeans and 
Africans came into sexual contact with what had been a racially 
homogeneous population. In its own conquests, however, the Inca 
Empire had embraced a wide range of cultural groups that spoke 
over fifty languages and practiced diverse customs. As a multicul- 
tural state, the Incas had grappled with the problem of tribal diver- 
sity and competition, often resolving their disagreements with 
conquered peoples through violence and repression. Another Inca 
solution to such dilemmas was to forcibly relocate recalcitrant popu- 
lations to more governable locations and replace them with trust- 
worthy communities. Peoples resettled in this manner were called 
mitimaes, and the process contributed significantly to the compli- 
cations of Andean ethnicity. In addition to these measures, the Incas 
often took the children of local leaders and other key personages 
as hostages to guarantee political tranquility. In some ways, then, 
the Inca experience harshly prefigured the Spanish conquest. 

With the arrival of conquering migrants from the Old World, 
new mixed races were born. The initial importance of these off- 
spring of whites and Africans with native American mothers was 
minimal, however, because of the "great dying" of the indigenous 
population instigated by European diseases and the subsequent col- 
lapse and demoralization of the native society and economy. The 
continuous impact of repressive colonial regimes did not permit 
any resurgence of native vitality or organization, although there 
were a number of rebellions and revolts. Under these conditions, 
Peru reached its nadir in 1796, near the end of the colonial pe- 
riod, when fewer than 1.1 million inhabitants were counted. This 
figure marked a fall from an estimated pre-Columbian total of at 
least 16 million, although some scholars think the figure may be 
twice that number, and others less. Peru recovered slowly, only 
slightly exceeding its minimally estimated preconquest population 
size in 1981 (see table 2, Appendix). 



79 



Peru: A Country Study 



The critical factors in population growth since the mid-nineteenth 
century have been the rapid emergence of the mestizo population, 
which grew at a rate of over 3 percent per year throughout the 
colonial period until the 1980s, and the reduction but not the dis- 
appearance of sweeping epidemic diseases. Another factor that 
played a role in this increase was the influx of foreign migrants 
from Europe, and especially from China and, more recently, Japan. 
The rate of growth became very high during the twentieth cen- 
tury owing to a number of factors. The then dominant mestizo 
and other mixed populations were obviously more resistant to the 
diseases to which the native peoples, lacking natural immunities, 
succumbed. The mestizos also enjoyed important cultural advan- 
tages in a colonialist society, which actively discriminated against 
the native population on racial and ethnic grounds. From conquest 
to the present, it has been the fate of the native peoples not to 
prosper. 

The Spanish colonial policy regarding population management 
in the viceroyalty, as throughout the hemisphere, was to create 
bureaucratic order through an official hierarchy of caste, with ob- 
ligations and privileges attached thereto. The system attempted to 
keep people sorted out according to genealogical history and place 
of birth. Thus, Europeans ranked first, followed by all others: a 
male offspring of a European and a native American was called 
a mestizo, or cholo; of a European and African, a mulatto; of an 
African and a native American, a zambo; of a mestizo and indio, 
a salta atrds (jump backward). The order encompassed all of the 
combinations and recombinations of race, with over fifty commonly 
used terms, many of which — such as mestizo, mulatto, zambo, cholo, 
criollo, indio, negro (Negro or black), and bianco (white) — survive 
in common usage today. For both white Europeans and Africans, 
there were two categories — those born in the Old World were called 
peninsulares and bosales, respectively, whereas those of both races 
born in Peru were called criollos (Creoles). In the case of whites, 
the fact that Creoles were lower in rank than their peninsular coun- 
terparts was resented and contributed eventually to the overthrow 
of colonial rule. 

There were six basic castes in Colonial Peru: Spaniards, native 
Americans, mestizos, Negroes, mulattos, and zambos. In theory, 
these categories defined a person's place of residence and occupa- 
tion, taxes, obligations to the viceroyalty under the mita, which 
churches and masses could be attended, and which parts of the 
towns could be entered. Sumptuary laws determined the nature 
of one's clothing as well, and prohibited natives in particular from 
riding horses, using buttons, having weapons, and even owning 



80 



The Society and Its Environment 



mirrors and playing stringed instruments. Such a system was hard, 
if not impossible, to keep on track, and its rules and powers were 
irregularly applied. Nevertheless, vestiges of the colonial social caste 
system and its associated behavior and attitudes linger in present- 
day Peruvian society in many ways. 

Although largely replaced along the coast by mestizos, Afro- 
Peruvians, and Chinese laborers, the native peoples survived bio- 
logically as well as culturally in the highlands. Their survival was 
attributed to many factors: the sheer numbers of their original popu- 
lation; their relative isolation, resulting in part from the collapse 
of the society and inefficiency of the colonial regimes; and the as- 
sumption of the kind of passive defensive posture of silence and 
apparent submissive behavior that has been characterized as a 
"weapon of the weak." In numerous cases, communities managed 
to place themselves under the wing of religious orders and, ironi- 
cally, the hacienda system, with its conditions of serfdom. This sit- 
uation developed with the demise of the system of serfdom called 
the encomienda (see Glossary) and the state monopoly of selling goods 
to the native peoples called the repartimiento (see Glossary). If noth- 
ing more, by becoming serfs on the haciendas, native Americans 
were defended by landlords, who were inclined to protect their peons 
from exploitation by others and especially from having to serve in 
the mita de minas (the mine labor draft — see Glossary). Conse- 
quently, the bastions of highland indigenous culture have been the 
small, isolated mountain villages and hamlets; dispersed farming 
and pastoral communities; and haciendas, where populations were 
encapsulated under protective exploitation and ignored by their 
absentee landlords. 

Settlement Patterns 

In pre-Columbian eras, the highland population was ensconced 
on ridges, hillsides, and other locations that did not interfere with 
farming priorities. Large ceremonial buildings, temples, or adminis- 
trative centers, were, however, located in central locations, often 
apart from the residences of average persons. By the time of con- 
quest, the Incas had rearranged settlements to suit their own vi- 
sion of administrative needs in conquered areas. Thus, Inca 
planners and architects constructed special towns and cities, such 
as Huanuco Viejo, to accommodate their needs. 

With Viceroy Francisco Toledo y Figueroa's colonial reforms 
in the late sixteenth century, however, the traditional Andean set- 
tlement patterns were drastically altered through the establishment 
of settlements called reductions (reducciones — see Glossary), which 
were located in the less advantageous areas, and the founding of 



81 



Peru: A Country Study 

new Spanish towns and cities. The reduction system forced native 
Americans to settle in nucleated villages and towns, which were 
easily controlled by their masters, the encomenderos (see Glossary), 
as well as by clergy and regional governors (corregidores de indios — 
see Glossary). The Spaniards also established their own towns, 
which were off-limits to most native peoples except for occasional 
religious celebrations or for work assignments. These towns even- 
tually became home to the dominant mestizos. As the municipal 
and economic centers of each district and province, these mestizo 
towns (poblachos mestizos) remain the dominant settlements, con- 
stituting the district and provincial capitals throughout the coun- 
try. Today, virtually all of the small towns and villages throughout 
the highlands are either the product of the reduction system of forced 
relocation or were established as Spanish colonial municipalities. 

The striking similarities among settlements in terms of design 
and architecture are no accident. Almost all settlements thus ex- 
hibit the grid pattern or model of rectangular blocks arranged 
around a town square, universally known as the arms plaza {plaza 
de armas). This design reflects the military dimension of the con- 
quest culture, the central place in an encampment being where arm- 
aments were kept when not deployed. By direct analogy, it also 
demonstrates and symbolizes central authority and power. Typi- 
cally, then, the most important residents lived close to the plaza 
de armas, in the most prominent houses. Status, conferred by birth, 
race, and occupation, was confirmed by a central urban residence. 
In modern practice, status has continued to be reflected in a hier- 
archy of urban residence descending from Lima to the departmen- 
tal, provincial, and district capitals. No one of importance or power 
is rural. 

Urban, Rural, and Regional Populations 

The change in distribution from rural to urban has been pro- 
found: the urban population rose from 47 percent in 1961 to an 
estimated 70 percent in 1990. By that time, Peru's population had 
reached a point where its configurations were thus substantially 
different than they were a generation earlier, largely because of 
the enormous growth of metropolitan Lima, which includes the 
seaport of Callao. Indeed, four of the largest political districts of 
greater Lima began as squatter settlements and now would rank 
among the nation's top ten cities if they had been counted sepa- 
rately. The leading cities in Peru represent a mix of old colonial 
places — Lima, Arequipa, Trujillo, Cusco (Cuzco), Piura, and 
lea — and newly emergent ones, such as Huancayo, Chimbote, 
Iquitos, and Juliaca, whose new elites derive mostly from the highly 



82 



Plaza de Armas, Cusco, with La Merced church in background 
Courtesy Inter-American Development Bank 

mobile provincial middle and lower classes (see table 6, Appen- 
dix). In the Sierra, Juliaca, because of its role in marketing and 
transportation, surpassed the departmental capital of Puno in both 
size and importance to become the most important city south of 
Cusco. 

Burgeoning cities, such as the industrial port of Chimbote, had 
a kind of raw quality to them in the early 1990s, with blocks and 
blocks of recently constructed one- and two-story buildings and a 
majority of streets neither paved nor cobbled. As the site of Peru's 
prestige industry — an electrically powered steel mill — and as a major 
port for the anchovy industry, Chimbote attracted bilingual mes- 
tizos and cholos, who continued to pour into the city from the high- 
lands of Ancash, especially the provinces of Huaylas, Corongo, 
Pallasca, and Sihuas. The migrants' dynamism, powered by a will 
to progress and modernize, built the city from a quaint seaside town 
of 4,200 residents in 1940 to 296,000 in 1990, with neither the ap- 
proval nor significant assistance of government planners or develop- 
ment programs. Although the energy and growth of Chimbote was 
impressive, the lack of urban infrastructure in the basic services, 
absence of attention to environmental impacts, and totally inade- 
quate municipal budgets led directly to converting Chimbote Bay, 
the best natural port on Peru's coast, into a cesspool of industrial 



83 



Peru: A Country Study 

and urban wastes (meters thick in places). Even smaller coastal 
boom towns, such as Supe, have suffered the same outcomes. It 
was not surprising that the 1991 cholera outbreak should have 
started in Chimbote. 

Just as the cities have grown, the rural sector's share of the popu- 
lation has declined. Nevertheless, in the early 1990s there were still 
more persons living in the rural regions than ever before in the 
nation's history. In fact, the rural population in 1991 equaled the 
total population of the country in 1961. 

At first, the country seemed to relish its growth even though the 
population explosion distressed the urbane sensibilities of the elite 
and the comfortable middle classes. Through its increase in size, 
Peru gained stature internationally and maintained a superiority 
of sorts vis-a-vis Ecuador, Bolivia, and Chile, its regional rivals. 
It could be maintained that Peru's policy was to let the population 
problem "solve itself through spontaneous migration by which 
people found their own solutions for the maldistribution of wealth, 
services, resources, and power. The vast and growing squatter set- 
tlements in Lima, however, gave many serious pause, and alter- 
natives were proposed (see Employment and Wages, Poverty, and 
Income Distribution, ch. 3). 

Demography of Growth, Migration, and Work 

Significant in different ways were the divisions according to the 
major ecological zones. In 1990 the coastal region held 53 percent 
of the nation's peoples; the highlands, 36 percent; and the Selva, 
the other 11 percent. This distribution pattern marked an abrupt 
change from almost thirty years earlier when the figures for coast 
and highlands were nearly the reverse. These shifts obviously had 
significant implications for the nation in terms of government, the 
economy, and social relations. For example, the agricultural sec- 
tor had two parts: the mechanized high-export production of the 
coastal plantations and cooperatives, and the intensively farmed 
small-holdings of the Sierra, which have depended most heavily 
on hand labor and have been essentially unchanged in technology 
since the colonial period. Although the highland farm technology 
was effective, Andean production was undermined by urbanward 
migrations and the revolution and repression of the 1980s. 

Within the contexts of these significant demographic changes, 
the general growth of the population has been constant since its 
low point at the end of the colonial period. Between 1972 and 1981 , 
the country grew by 25 percent. The increase may have been greater 
between 1981 and 1991, reaching over 30 percent, if projections 
were correct (see fig. 6). The increase ran counter to the anticipated 



84 



The Society and Its Environment 



benefits stemming from the continued drop in fertility rates, which 
declined from 6.7 children born per woman in 1965 to 3.3 in 1991, 
and in birthrates, which dropped from a high of 45 births per 1 ,000 
in 1965 to 27 per 1,000 in 1992. The crude death rates, however, 
despite the many problems in health care, fell over this same pe- 
riod from 16 to 7 per 1,000, basically matching the decline in the 
birthrate and retaining the actual rate of population growth near 
its same level as before. Life expectancy for males in Peru has in- 
creased from fifty-one years in 1980 to estimates of sixty-three years 
in 1991, second lowest in South America after Bolivia. Demo- 
graphers projected that Peru's population would reach 28 million 
by the year 2000 and 37 million in 2025 if these rates continued. 
Contemporary dilemmas paled before the problems posed by such 
estimates. A significant lowering in infant deaths would markedly 
increase the overall growth rate and accompanying problems posed 
to institutions, services, and resources. 

Population Policy and Family Planning 

The issue of slowing population growth through the systematic 
implementation of modern birth-control methods had remained low- 
key since the late 1960s but erupted during the 1980s, as a result 
of pressure coming particularly from women. Research in the early 
1980s showed that over 75 percent of women wished to use con- 
traceptives, but over 50 percent did not do so out of fear and un- 
certainty about their effects or because of the disapproval of the 
spouse. In this context, the 1985 Law of the National Population 
Council came into being under the premise that although abor- 
tion and voluntary sterilization were excluded, all other "medi- 
cal, educational, and information services about family planning 
guarantee that couples and all persons can freely choose the method 
for control of fecundity and for family planning." The proposed 
law was opposed in 1987 by the Assembly of Catholic Bishops, 
which retained its opposition to artificial methods and "irrespon- 
sible philosophies." Implementation of the law, however, began 
that year, setting targets for lowering fecundity rates to 2.5 chil- 
dren per family by the year 2000 and greatly amplifying the avail- 
ability of clinical resources and contraceptives. In addition to 
government programs, there were sixteen private organizations 
promoting various aspects of the policy by 1988. 

In 1986 a reported 46 percent of women of child-bearing age 
were using some form of contraception, but it was not known what 
percentage of men used contraceptives. The data on the incidence 
of abortions was not compiled until the 1980s, but according to 
hospital reports, in 1986 there were 31,860 abortions performed 



85 



Peru: A Country Study 




Source: Based on information from Richard Webb and Graciela Fernandez Baca de Val- 
dez (eds.), Peru en numeros, 1990, Lima, 1990, 105. 



Figure 6. Estimated Population by Age and Sex, 1990 



for life- threatening sociomedical reasons, which represented almost 
43 percent of all hospital cases involving obstetrical procedures. The 
estimated rate of clandestine abortions, however, was reportedly at 
the high rate of 143 cases per 1,000 pregnancies, despite a law that 
in theory prohibited such interventions. A survey in 1986 of wom- 
en's attitudes toward contraception and family planning showed that 
over 27 percent of women would halt their family size after one child, 
69 percent would limit their family to two, and over 80 percent 
desired no more than three children. It was clear from this response 
that Peruvian women wanted to limit family size and that their de- 
mands for increased state and private services would continue to rise. 

During the 1975-90 period, contraceptives became more widely 
available throughout Peru, being distributed or sold nationwide 
through Ministry of Health programs and private clinics, phar- 
macies, and even by street vendors in marketplaces. Pharmacies 
were the most common source of both information about and sup- 
ply of contraceptives. Not surprisingly, use of birth-control tech- 
niques increased sharply with socioeconomic status, educational 
level, and urban coastal residence. 



86 



The Society and Its Environment 



Lima and the Patterns of Migration 

The first Belaunde administration (1963-68) initiated concerted 
efforts to develop the Amazon Basin through its ambitious Jungle 
Border Highway (la carretera marginal de la selva or la marginal) pro- 
gram, the organization of colonization projects, and special oppor- 
tunity zones to steer highland migrants in that direction and away 
from the coast. Belaunde 's Selva-oriented program thus tended to 
divert investments away from the Sierra, even though much was 
done there on a small local scale through the self-help Popular 
Cooperation (Cooperation Popular) projects. In hindsight, the 
resulting degradation of the tropical biosphere in the wake of these 
schemes created new sets of problems that were far from anyone's 
mind in 1964. Unfortunately, the net result of these expensive and 
sweeping efforts at tropical development has not been as planned. 
Significant changes in the direction of migration did not take place, 
and the jungle perimeter road system covering hundreds of kilo- 
meters was often used as landing strips by airborne drug traffick- 
ers and for military maneuvers. 

Just as there are strong ''pull" factors that attract persons to 
Lima and the other major cities, there are also many conditions 
that "push" people out of their communities: the loss or lack of 
adequate farmland, natural disasters such as earthquakes and land- 
slides, lack of employment options, and a host of personal reasons. 
In addition, since the outbreak of terrorist activities by the Shin- 
ing Path movement in 1980 and subsequent military reactions, over 
30,000 persons have been dislocated from towns and villages in 
the Ayacucho and Huancavelica highlands, most of them gravitating 
to lea or Lima. 

The profound changes during the 1950-90 period, spurred by 
sheer increases in numbers, largely resulted from a desire for bet- 
ter life opportunities and progress. The significant demographic 
change that took place was the migration from rural areas to the 
cities, especially Lima. Five major features gave this great migra- 
tion a particular Peruvian character: the concentration of people 
in Lima and other coastal cities, the regional heterogeneity of the 
migrants, the tendency of people to follow their family and paisanos 
to specific places, the development of migrant organizations, and 
the willingness of migrants to assist their homelands. 

The migrants, searching for employment and better living con- 
ditions, went predominantiy from the provinces to the national cap- 
ital, creating a megalopolis out of Lima and Callao. In 1990 greater 
Lima had over 30 percent of all Peruvians as residents. On the 
north coast, cities such as Piura, Chiclayo, and Trujillo have 



87 



Peru: A Country Study 

attracted persons from their own regions in considerable numbers; 
significant growth has occurred in the southern highland cities of 
Arequipa, Juliaca, and Cusco, as well as in the remote jungle city 
of Iquitos. Despite rates of increase averaging more than 330 per- 
cent between 1961 and 1990, these cities drew few people com- 
pared to the numbers of persons drawn to greater Lima. In 1990 
Lima was 14 percent larger than the next 24 cities combined, and 
58 percent of all urban dwellers lived in greater Lima. As such, 
Lima had become one of the world's leading cities in terms of its 
level of primacy, that is, its overwhelming demographic dominance 
with respect to the next largest urban centers. 

Lima's development as a "primate" city (megalopolis) began 
taking shape during the nineteenth century when the nation was 
recuperating from the disastrous War of the Pacific (1879-83) with 
Chile. This trend accelerated dramatically after about 1950, when 
the fishing industry began its expansion and Peru started to in- 
dustrialize its urban economy in a determined manner. Thus, 
throughout most of this long period, no less than a third of the cap- 
ital's residents were born elsewhere. 

Lima's dominance has been more than demographic. In the late 
1980s, the metropolis consumed over 70 percent of the nation's 
electrical energy; had 69 percent of its industry, 98 percent of pri- 
vate investment, and 83 percent of bank deposits; yielded 83 per- 
cent of the nation's taxes; had 42 percent of all university students, 
taught by 62 percent of all professors; and had 73 percent of the 
nation's physicians. Over 70 percent of the country's wages were 
paid out in Lima to 40 percent of all school teachers, 51 percent 
of public employees, and equivalent percentages of the skilled labor 
force and other urban workers. From television and radio stations 
to telephones, most consumer goods, recreational facilities, and 
other items of modern interest were also concentrated in Lima. 
In short, if Peru had it, it came first to Lima and more often than 
not was unavailable elsewhere. 

Government, too, has been totally centralized in the capital since 
the establishment of the viceregal court in the sixteenth century. 
The centrality of Lima in colonial times was so significant that per- 
sons committing crimes were often punished by exiling them from 
the capital for various periods of time; the farther away, the worse 
the penalty. This notion still underlies much of the cultural con- 
cept of social value in Peru today. Everyone living outside of greater 
Lima is automatically a provincial (provinciano) , a person defined 
as being disadvantaged and, perhaps, not quite as civilized as a 
limeno. Under such circumstances, it is hardly surprising that Lima 
has attracted the vast majority of Peruvians hoping to improve their 



88 



The Society and Its Environment 



lives, whether looking for employment, seeking an education, or 
attempting to influence bureaucratic decisions and win assistance 
for their communities. Lima has been both hated and loved by 
provincianos, who have been engaged in unequal struggle for access 
to the nation's wealth and power. The factor of primacy loomed 
as one of Peru's most significant problems, as the nation attempted 
to decentralize various aspects of the government under a reor- 
ganization law promulgated in March 1987 (see Regionalism and 
Political Divisions, this ch.). 

Another aspect of the migration had to do with its heterogen- 
eity of origin in terms of both place and sociocultural features. At 
the beginning of the twentieth century, most of the provincial 
migrants were fairly homogeneous representatives of local elites 
and relatively prosperous sectors of provincial urban capitals. The 
last decades of the century, however, have seen a marked growth 
in the social and cultural diversity of the migrants. Between 1950 
and 1990, increasing numbers of persons came from villages and 
hamlets, not the small district capitals, and thus were more represen- 
tative of the bilingual and bicultural population, referred to as cholos. 
Whereas in the earlier years of this period, it was unusual to hear 
migrants speaking the Quechua or Aymara languages on the street, 
by 1990 it was commonplace to hear these languages used for com- 
merce and general discourse in Lima. This change occurred mostly 
after 1970, when the populist military regime of Juan Velasco 
Alvarado began a strong effort to legitimize the native tongues. 
And thus, it has also become more common to see persons retain- 
ing various aspects of their regional clothing styles, including hats 
and colorful skirts, and in, general, not discarding those cultural 
class markers that were so denigrated a short generation earlier. 

A third migratory pattern was that people invariably followed 
in the footsteps of relatives and fellow paisanos. Once a village had 
a few paisanos established in the city, they were soon followed by 
others. During the course of Peruvian migration, relatively few per- 
sons simply struck out on the migratory adventure alone. Thus, 
the society of migrants was not a collection of alienated ' 'lost souls, ' ' 
but rather consisted of groups of people with contacts, social roles, 
and strong cultural and family ties. 

This fact produced the fourth dimension of the Peruvian migra- 
tory process: the propensity of migrants to organize themselves into 
effective voluntary associations. The scale and pattern of these as- 
sociations distinguished the process in Peru from that in most other 
countries. The organizations have taken several forms, but the two 
most outstanding examples are found in the squatter settlements 
and regional clubs that have proliferated in all the largest cities, 



89 



Peru: A Country Study 

particularly Lima. The process of urban growth in Lima has 
produced an urban configuration that conforms to no central plan. 
Without access to adequate housing of any type, and without funds 
or available loans, migrants set about developing their own solu- 
tions by establishing organizations of their own, occasionally under 
the sponsorship of APRA. They planned a takeover of unoccupied 
land at the fringes of the city and, with the suddenness and effec- 
tiveness of a military attack, invaded the property, usually on a 
Saturday night. 

Once on the land, the migrants laid out plots with precision and 
raised temporary housing in a matter of hours. Called by the some- 
what deprecatory term barriada (see Glossary), the shantytowns 
quickly developed both an infrastructural and a sociopolitical per- 
manence, despite initial official disapproval and police harassment. 
At first, the land invasions and barriada formation provoked enor- 
mous unease among traditional limenos and especially in the halls 
of government. The barriadas were wildly characterized as danger- 
ous slums by the Lima middle- and upper classes, which felt threat- 
ened by the squatters. Research by anthropologists Jose Matos Mar 
and William Mangin demonstrated beyond doubt, however, that 
these "spontaneous settlements" were, in fact, solutions to grave 
urban problems. Subsequent research by anthropologist Susan Lobo 
established that such settlements were civilly organized and rapidly 
assumed positive urban attributes under the squatters' own ini- 
tiatives. 

In 1990 there were over 400 of these large settlements surround- 
ing Lima and Callao, containing at least half of Lima's popula- 
tion. Over time, many of them — such as San Martin de Porres, 
Comas, and Pamplona Alta — had become new political districts 
within the province of Lima, with their own elected officials and 
political power. Political scientists Henry A. Deitz and David Collier 
have called attention to squatter organizations as mechanisms of 
empowerment for persons otherwise denied a base or place in the 
political system. An important step for the squatters was the ac- 
quisition of the skill and the ability to exercise influence in the cor- 
ridors of bureaucratic power. As these settlements and their 
organizations gained public legitimacy in the 1960s, the Velasco 
government, on assuming power in 1968, soon renamed them pueb- 
los jovenes, a name which was quickly adopted and has remained. 

The regional club aspect of Peru's urban migration was not as 
obvious a phenomenon as the ubiquitous squatter settlements. The 
need for a social life, as well as the desire to maintain contact with 
the home community, friends, and relatives, had moved migrants 



90 



El Agustino, a northern Lima district and "young town" 
Courtesy Inter-American Development Bank 

from particular villages and towns to create representative organi- 
zations based on their common place of origin. As a result, accord- 
ing to Teofilo Altamirano, in 1990 there were over 6,000 such clubs 
in greater Lima, with hundreds more to be found in the other major 
cities. Not only have these clubs provided an important social venue 
for migrants, but they also have served as a vehicle by which mem- 
bers could give not insubstantial assistance to their homeland 
(terruno), when called for. 

Regionalism and Political Divisions 

The formidable mountain ranges, deep chasms, and deserts that 
partition the habitable regions of Peru contribute gready to the for- 
mation and maintenance of political and social identities by facilitat- 
ing or obstructing communication, as well as by creating economic 
diversity through zonal specializations. Archaeologists and ethno- 
historians have identified some forty-four different highland cultures 
and thirty-eight more in coastal valleys that existed at the time of 
the rise of the Inca Empire in the fifteenth century. Tawantinsuyu 
(Land of the Four Quarters) retained these preexisting ethnogeo- 
graphic zones in one form or another, according to anthropologist 
Michael Moseley, establishing at least eighty ethnically distinct po- 
litical provinces throughout the empire's vast territory. 



91 



Peru: A Country Study 



The policies of the Tawantinsuyu presaged subsequent geo- 
political territorial arrangements. The "quarters" were unequal 
in size and population, but roughly corresponded to the cardinal 
directions. Each region began with its cobbled roadway leaving the 
"navel" of the city of Cusco, whose perimeters shaped a symbolic 
Andean puma. To the north, Chinchaysuyu encompassed most 
of the coast and highlands of modern Peru, from Nazca, and even- 
tually with conquest, to what is now northern Ecuador. In terms 
of the divisions of the Inca Empire, 68 percent of Peruvians in 1990 
lived in Chinchaysuyu. To the south stretched the vast region of 
the puna and Lake Titicaca Basin called the Collasuyu. With the 
Inca conquests, the Collasuyu quarter extended to the Rio Maule 
in what is now central Chile. To the east and west were two rela- 
tively small quarters, the Antisuyu and Cuntisuyu, respectively. 
The former occupied the forested semitropical highland region called 
Montana, and the latter, the arid mountains and coast encompass- 
ing present-day Arequipa and adjacent departments. Seen in this 
perspective, 41 percent of the people lived in four departments 
occupying the central region of the country, with 27 percent in the 
northern area, 23 percent in the south, and 8 percent in the Amazo- 
nian departments of the east in 1990. These four modern quarters 
of Peru often have been utilized in the context of planning studies. 

The Spaniards reorganized the Tawantinsuyu on discovering that 
the highland Inca capitals at Cusco and Cuenca (Ecuador) and their 
own first choice of Jauja near present-day Huancayo suited neither 
their physiological nor political needs. When they founded Lima, 
the Spaniards turned the Inca spatial concepts upside down: cen- 
trality and place were reoriented as Cusco became a province and 
no longer was the "navel of the universe" from which all roads 
departed. Despite this change, Spanish viceregal organization 
educed its structure from longstanding ethnolinguistic and ecological 
realities. The Spaniards formed provinces (corregimientos — see Glos- 
sary), which later became intendancies (intendencias) , as well as 
Catholic dioceses or parishes. 

With independence, the colonial territories were again redefined, 
but in most cases, the "new" politico-administrative boundaries 
still recalled ancient cultural and linguistic outlines. The republic 
carried forward many operational aspects of the colonial adminis- 
trative units. Throughout their national history, Peruvians have 
demonstrated a propensity to revise their political affairs both with 
respect to leadership and the boundaries within the nation. In 1980 
the department of Ucayali was created by splintering off two 
provinces from the Selva department of Loreto, a reflection of de- 
velopment and population increases in that immense tropical region. 



92 



(descendants of the Lupacas) 
in a totora-reed hut on Lake 
Titicaca 's floating island 
Courtesy Harvey W. Reed 




Moreover, after the census in 1981 , six new provinces in Cajamarca, 
Ancash, and Ucayali departments and twenty new districts were 
created in various parts of the country through legislative acts. The 
new districts included six in the populous highland department of 
Cajamarca; three each in Ucayali, Puno, and Ancash; two in the 
province of Lima; and others in the departments of Huanuco and 
Cusco. Each time a census occurs, political and social identities 
are further refined, usually building on old traditions of similitude, 
as well as a desire for separate political representation and control. 

The result was a nation divided into a political hierarchy of 24 
departments, 159 provinces, and 1,717 districts, each with its ur- 
banized capital symbolized by a plaza bordered by a "mother 
church" and municipal office. Peruvians invariably identify them- 
selves as being from one of these divisions, as the place of birth, 
and thus everyone carries a locality identity as a limeno from Lima, 
a chalaco from Callao, a cuzqueno from Cusco, a huaracino from 
Huaraz, and so forth, down to the smallest hamlet. The political 
fissioning thus reflects a strong geocultural identity and bonding, 
manifested by the establishment and activities of thousands of 
regional and local clubs and associations by migrants from these 
places who live in cities throughout the country. 

Provincial migrants, especially those in greater Lima, play im- 
portant and often key roles in the creation of new political divi- 
sions back in their homelands, as was the case by 1990 in the 



93 



Peru: A Country Study 

highland district of Santo Toribio in the province of Huaylas. The 
new district was the result of political antagonisms originating in 
colonial times between the small mestizo district capital of Huaylas 
and its rural hinterland of Santo Toribio. After more than sixty 
years of plots and counterplots in Lima and in the patria chica 
(hometown or "little homeland"), the partisans of Santo Toribio, 
represented by migrants in Lima, finally won out over the Huaylas 
district lobby made up of migrants from the town that sought to 
maintain district unity. 

In this maneuvering, the national political parties were used as 
the fulcrum on which the scales were tipped. The municipal govern- 
ment of Huaylas was held by members of the Popular Action 
(Accion Popular — AP) party, whereas the Santo Toribio interests 
were aligned with the American Popular Revolutionary Alliance 
(Alianza Popular Revolucionaria Americana — APRA) party, which 
took power nationally under Alan Garcia Perez (president, 1985- 
90). This scenario is replicated throughout the highlands and is 
at the core of virtually all such alterations in political boundaries. 
In most cases, the imbroglio develops as rural villagers, native 
Americans, and cholos vie for power with the mestizo townspeople 
who have dominated them for centuries. 

The same struggle has accompanied the dramatic growth of 
greater Lima, to which migrants from the provinces have gone to 
seek access to power, as well as education and jobs. Understand- 
ing the political structure of Lima is in itself a study in the process 
of empowerment. The city of Lima is actually a collection of munici- 
palities. Instead of the two municipal districts of colonial time — 
Lima and Rimac — by 1961 Lima contained fifteen district munici- 
palities, and by 1990 it had grown to thirty-three, all the result 
of migration. Like all their provincial counterparts, each municipal 
district has its plaza, elected mayor and council, and municipal 
functions. The government of the province of Lima unites them 
and coordinates the metropolis as an urban entity. The rest of 
metropolitan Lima consists of the constitutional province of Callao, 
the old colonial port. Callao is fused with the capital by a continu- 
ous blanket of housing projects, squatter settlements, and industries 
through which one passes en route to Jorge Chavez International 
Airport from Lima. Even so, in early 1991 there were still small 
patches of irrigated farmland at the northern fringe of Callao 
Province, awaiting the next spurt of urban growth to engulf them. 

The administrative system of departments, provinces, and dis- 
tricts is under the central authority of the national executive, that 
is, the president and prime minister. As such, the decisions and 



94 



The Society and Its Environment 



policy inevitably and ultimately descend from a government over- 
whelmed by the needs, demands, and power of Lima. The cen- 
tralization of power is resented and regarded as anachronistic, a 
problem that has provoked debate since 1860 about the wisdom 
of decentralization and how it might be accomplished. 

The reorganization decree promulgated by the Garcia govern- 
ment in March 1987 put forth a plan to decentralize the nation 
and establish new administrative zones, regrouping the present 
twenty-four departments into twelve larger regions with legislative, 
administrative, and taxing powers (see Local and Regional Govern- 
ment, ch. 4). Interestingly, the names Inca, Wari (Huari), and 
Chavm have been applied to areas where those ancient cultures 
once thrived. If the system becomes fully installed, it will dramati- 
cally alter Peru as a nation and would be the most significant change 
in structure since independence. In the early 1990s, few Peruvi- 
ans yet understood how the new system would work or what its 
impact would be. Because of many uncertainties created by the 
unstable political and economic conditions of the 1980s, both the 
Congress and the government of President Alberto K. Fujimori 
(1990- ) postponed putting the full plan into effect, although some 
aspects of the program had begun (see Local and Regional Govern- 
ment, ch. 4). 

Culture, Class, and Hierarchy in Society 

A large part of Peru's complicated modern social system started 
with the hierarchical principles set down in colonial times. They 
remain as powerful guidelines for intergroup and interpersonal be- 
havior. Peru's ethnic composition, however, is mixed. In the early 
1990s, Europeans of various background made up 15 percent of 
the population, Asians from Japan and China and Africans formed 
3 percent, the mestizo population constituted 37 percent, and the 
native Americans made up 45 percent, according to various United 
States and British reference sources. However, it is difficult to judge 
the composition of the native population because census data have 
generally undercounted or frequently failed to identify ethnic groups 
successfully. Even using language as the primary criterion does not 
take bilingualism adequately into account and omits other aspects 
of cultural behavior altogether. Thus, although Cajamarca Depart- 
ment is 98-percent Spanish-speaking, the bulk of the rural popu- 
lation lives in a manner identical to those classified as native people 
because they speak Quechua. The question as to who is a native 
has been an oft-debated issue. But how the individual chooses to 
classify his or her cultural identity is determined by the forces of 
society that give ethnic terms their social meaning. Because of 



95 



Peru: A Country Study 

Peruvian society's longstanding negative attitudes and practices 
toward native peoples, persons who have become socially mobile 
seek to change their public identity and hence learning Spanish 
becomes critical. Denial of the ability to speak Quechua, Aymara, 
or other native languages often accompanies the switch. 

Another separate dimension of the "Indian problem" so wide- 
ly discussed by Peruvian essayists has to do with the natives living 
in the Selva and high Selva, or Montana, regions of the country. 
The tribal peoples have a tenuous and generally unhappy relation- 
ship with Peruvians and the state, evolved from long experience 
along the tropical frontier. The Incas and their predecessors ven- 
tured only into the fringes of the region called Antisuyu, and the 
Spanish followed their pattern. The inhabitants were known col- 
lectively as savages (chunchos). In documents they are politely 
referred to as jungle people {selvicolas or selvdticos). Thought to be 
savage, wild, and dangerous but usually described as "simple" 
and innocent, they are also widely considered to possess uncanny 
powers of witchcraft and healing. Here, the sixteenth-century con- 
cept of the "noble savage" vies with equally old notions that these 
are lazy, useless people who need to get out of the way of progress. 
Indeed, modern currents of developmental change, the expand- 
ing drug trade, oil exploration, the clearing of the forest, and the 
search for gold in Madre de Dios Department have placed native 
peoples under great pressures for which they are little prepared. 
The Selva tribes, like native highlanders, Afro -Peruvians, and other 
people "of color," are those who feel the discriminatory power of 
the colonial legacy as well as modern stresses, especially if they are 
poor. In demographic terms, the impact of poverty and oppres- 
sion has been, and remains, considerable. Thus, the mortality rates 
of native peoples and especially their children are much higher than 
those of the general population. Tribal peoples are still widely sus- 
ceptible to numerous uncontrolled infectious diseases and outside 
the religious missions have little or no access to scientific medical 
care. 

The tribal peoples of the lower Selva along the major rivers have 
endured the stress and danger of contact with outside forces longer 
than those groups located at the upper reaches of the streams. It 
is in these "refuge areas" that most of the present tribal popula- 
tions survive (see fig. 7). More than any other sector of the popu- 
lation, the rural peoples of the Selva, and especially the tribal 
groups, live at the fringe of the state both literally and figuratively, 
being uncounted, unserved, and vulnerable to those who would 
use the area as their own. According to anthropologist Stefano 
Varese, there are about 50 tribes numbering an estimated 250,000 



96 





International boundary 




Ethnolinguistic group boundary 


(-£•1 


National capital 





Populated place 


A 

A 


Family 


1 


Dialect 


rzz 


Spanish 




Unknown 





100 200 Kilometers 



ECU 




QUECHUA I 

1. Conchucos, Huancacas 

2. Huanca 

3. Huayhuash, Huaylas 
B QUECHUA II 

4. Ayacuchano 



Aymara 

Cuzquefio, Jararo, or 
Cauqui 

Nortefio (Northern) 
Selvatico (Jungle) 

C AMAZONIAN LANGUAGES 

Aguaruna, Arawakan 

10. Amuesha 

1 1 . Campa (Ashaninka), 
Cahuapana 

12. Catuquinea-Tucano 

13. Secoya, Shimacu 

14. Huambiza 

15. Jfvaro, Pano, and Tacana 

16. Arasaire 

17. Cashinahua 

18. Coshibo 

19. Piro 

20. Shipibo, Peba-Yagua, 
and Huitoto 

21. Bora 

22. Huitoto 

23. Yagua, Shimacu, 
Tupi-Guarani 

24. Cocama-Cocamilla, 
Zaparo 

25. Jebero 

NOTE: Dialects without numbers are 
not shown. 



Source: Based on information from Anfbal 
y el mundo, Lima, 1991, 557. 



Figure 7. Principal Ethnolinguisti 
98 



The Society and Its Environment 



persons and maintaining active communities, scattered princi- 
pally throughout the departments of Loreto, Amazonas, Ucayali, 
Huanuco, and Madre de Dios. The national census, however, has 
lowered its estimates from 100,830 in 1961 to 30,000 in 1981 for 
the tribal peoples, even though field studies have not supported 
such conclusions. 

In the Selva, tribal lands in the early 1990s were in even more 
jeopardy than the Quechua and Aymara farmland in the Sierra. 
Although community rights were acknowledged, if not respected, 
in the Andes, outsiders have virtually never accepted this fact in 
the case of the Amazonian peoples. Nevertheless, apparently many 
tribal societies, such as the Shipibo, have held their traditional hunt- 
ing, fishing, and swidden lands in continuous usufruct for as long 
as 2,000 years. As a result of the land reforms under the Velasco 
government, however, laws established the land rights of Amazo- 
nian native communities. Consequently, some groups, such as the 
Cocama-Cocamilla, have been able to secure their agroecological 
base. 

The Afro-Peruvians who came as slaves with the first wave of 
conquest remained in that position until released from it by Marshal 
Ramon Castilla (1845-51, 1855-62) in 1854. During their long co- 
lonial experience, many Afro-Peruvians, especially the mulattos 
and others of mixed racial parentage, were freed to assume working- 
class roles in the coastal valleys. Even fewer blacks than Europeans 
settled in the highland towns and for virtually all the colonial epoch 
remained concentrated in the central coastal valleys. Lima's colonial 
population was 50 percent African during much of the era. Indeed, 
the term "criollo" was originally identified with native-born blacks 
and acquired much of its special meaning in association with urban, 
streetwise behavior. The social status of blacks in many ways 
paralleled that of the native Americans in rank and role in society. 

Completing the human resource mix in Peru were the immigrants 
from Europe and Asia. The former arrived with the advantages 
of conquest; the latter arrived first as indentured laborers and later 
as Japanese and Taiwanese immigrants who pursued careers in 
truck farming, commerce, and business. The Chinese who were 
brought to Peru from Macao and other ports between 1849 and 
1874 numbered about 90,000. The Chinese influx occurred in the 
same period as the United States' importation of Chinese workers, 
and many of the latter were eventually shipped from San Fran- 
cisco to Lima. Most Chinese eventually survived their indentures 
and took up residence in the coastal towns where they established 
themselves as active storekeepers and businesspeople. The growth 
of the Japanese presence in Peru began early in the twentieth 



99 




Figure 7. Principal Ethnolinguislic Divisions, 1991 
98 



Peru: A Country Study 

century and quietly increased over the 1970-90 period. In 1990 
Japanese immigrants constituted the largest foreign group in Peru 
and were rapidly integrating into Peruvian culture, gaining posi- 
tions from president (Fujimori) to popular folk singer (the "Little 
Princess from Yungay"). In the middle range of Peruvian class 
structure, the Chinese and especially the Japanese have achieved 
status and mobility in ways the native peoples have not. 

The key to understanding Peruvian society is to view aspects 
of its dynamic ethnoracial character as a set of variables that con- 
stantly interplays with socioeconomic factors associated with so- 
cial class configurations. Thus, a native American might acquire 
the Spanish language, a university education, a large amount of 
capital, and a cosmopolitan demeanor, but still continue to be con- 
sidered an indio (Indian) in many circles and thus be an unaccept- 
able associate or marital companion. Yet, there is opportunity for 
socioeconomic mobility that permits ambitious individuals and fam- 
ilies to ascend the hierarchy ranks in limited ways and via certain 
pathways. Such mobility is easier if one starts on the ladder as a 
mestizo or a foreigner, but especially if one is white. 

Indigenous Peoples 

The word indio, as applied to native highland people of Quechua 
and Aymara origin, carries strong negative meanings and stereo- 
types among mestizo and white Peruvians. For that reason, the 
ardently populist Velasco regime attempted with some success to 
substitute the term peasant (campesino) to accompany the many 
far-reaching changes his government directed at improving the 
socioeconomic conditions in the highlands. Nevertheless, traditional 
usage has prevailed in many areas in reference to those who speak 
native languages, dress in native styles, and engage in activities 
defined as native. Peruvian society ascribes to them a caste status 
to which no one else aspires. 

The ingrained attitudes and stereotypes held by the mistikuna (the 
Quechua term for mestizo people) toward the runakuna (native 
people — the Quechua term for themselves) in most highland towns 
have led to a variety of discriminatory behaviors, from mocking 
references to "brute" or "savage" to obliging native Americans 
to step aside, sit in the back of vehicles, and in general humble 
themselves in the presence of persons of higher status. The pat- 
tern of ethnoracist denigration has continued despite all of the pro- 
tests and reports, official policies, and compelling accounts of 
discrimination described in Peruvian novels published since the 
beginning of the twentieth century. 



100 




The regions and departments with the largest populations of na- 
tive peoples are construed to be the most backward, being the 
poorest, least educated, and less developed. They are also the ones 
with the highest percentages of Quechua and Aymara speakers. 
The reasons for the perpetuation of colonial values with respect 
to autochthonous peoples are complex; they involve more than a 
simple perseverance of custom. The social condition of the popu- 
lation owes its form to the kinds of expectations embedded in the 
premises and workings of the nation's institutions. These are not 
easily altered. Spanish institutions of conquest were implanted into 
colonial life as part of the strategy for ruling conquered peoples: 
the indigenous people were defeated and captured and thus, as spoils 
of war, were as exploitable as mineral wealth or land. In the minds 
of many highland mestizos as well as better-off urbanites, they still 
are. 

Although the Spanish crown attempted to take stern control over 
civic affairs, including the treatment, role, and conditions of na- 
tive Americans who were officially protected, the well-intended 
regulations were neither effective nor accepted by Creole and im- 
migrant interests. Power and status derived from wealth and posi- 
tion, are considered not only to come from money and property, 
but also from the authority to exercise control over others. Func- 
tionaries of the colonial regime paid for their positions so that they 
could exact the price of rule from their constituent populations. 



101 



Peru: A Country Study 

Encomenderos, corregidores , and the numerous bureaucrats all held 
dominion over segments of the native population and other castes, 
which were obliged to pay various forms of tribute. With the decline 
of the colonial administration and the failure of the many attempts 
at reform to control the abuses of the native peoples, Peru's politi- 
cal independence saw a transfer of power into the hands of white 
Creoles and mestizos, the latter of whom made up the majority 
of Peru's citizens in the early 1990s. 

The growth of large estates with resident serf populations was 
an important feature of this transition period. The process benefited 
from the new constitutional policies decreeing the termination of 
the Indigenous Community (Comunidad Indfgena) — the corporate 
units formerly protected by the crown. The subsequent breakup 
of hundreds of communities into individually owned properties led 
directly to these lands being purchased, stolen, or usurped by eager 
opportunists in the new society. The most critical native Ameri- 
can franchise was thus lost as entire communities passed from a 
relatively free corporate status to one of high vulnerability, sub- 
ject to the whims of absentee landlords. Although the development 
of haciendas occurred rapidly after the demise of the colonial re- 
gime, the system of debt serfdom had long been in place in the 
form of the encomienda system. Under the encomienda system, the 
crown in place assigned property and natives to reward particular 
individuals for their service to the crown. Institutions such as the 
church and public welfare societies that aided the poor by operat- 
ing hospitals and orphanages also benefitted from the encomienda 
system. Debt peonage constituted the basic labor arrangement by 
which landlords of all types operated their properties nationwide. 
The system endured until it was abolished by the land reform of 
1969. 

Legacy of Peonage 

Although a thing of the past, the numbing effects of four centu- 
ries of peonage on Peruvian society should not be underestimated. 
One archetypical Andean estate operated at Vicos, Ancash Depart- 
ment, from 1594 to 1952, before it became part of Peru's first land- 
reform experiment. The 17,000-hectare estate and the landlord's 
interests were managed by a local administrator, who employed 
a group of straw bosses, each commanding a sector of the property 
and directing the work and lives of the 1,700 peons (colonos) at- 
tached to the estate by debt. Dressed in unique homespun woolen 
clothing that identified them as vicosinos (residents of Vicos), each 
colono family lived in a house it built but did not own. Rather, it 
owed the estate three days of labor per week, and more if demanded, 



102 



The Society and Its Environment 



in exchange for a small subsistence plot and limited rights to graze 
animals on the puna. Grazing privileges were paid for by dividing 
the newborn animals each year equally between colono and land- 
lord. For the work, a symbolic wage (temple) of twenty centavos 
(about two cents in United States currency of the time) and a por- 
tion of coca and alcohol were given to each peon. In addition, peons 
were obliged to provide other services on demand to the adminis- 
trator and landlord, such as pasturing their animals, serving as 
maids and servants in their homes, running errands of all types, 
and providing all manner of labor from house construction to the 
repair of roads. The landlord might also rent his peons to others 
and pay no wage. 

To enforce order on the estate, the administrator utilized "the 
fist and the whip." Vicos had its own jail to which colonos were 
sent without recourse to any legal process; fines, whippings, and 
other punishments could be meted out arbitrarily. As individuals, 
the colonos were subject to severe restrictions, not being allowed 
to venture outside of the district without permission, or to organize 
any independent activities except religious festivals, weddings, and 
funerals that took place in the hacienda's chapel and cemetery, only 
occasionally with clerical presence. The only community-initiated 
activities allowed were those under the supervision of the parish 
church. 

Outside the protection of the estate, peons correctly felt them- 
selves to be vulnerable to exploitation and feared direct contact with 
those mistikuna whom they regarded as dangerous, even to the ex- 
tent of characterizing whites and powerful mestizos as pishtakos, 
mythical bogeymen who kill or rape natives. In protecting them- 
selves from the threats of this environment, vicosinos, like tens of 
thousands of other colonos across the Andes, chose to employ the 
"weapons of the weak," by striking a low profile, playing dumb, 
obeying, taking few initiatives, and in general staying out of the 
way of mestizos and strangers they did not know, reserving their 
own pleasures and personalities for the company of family and 
friends. 

Peonage under the hacienda functioned in a relatively standard 
fashion throughout Peru, with variations between the coastal plan- 
tations, on the one hand, and the highland estates and ranches, 
on the other. On some highland estates, conditions were worse than 
those described; in others they were not as restrictive or arbitrary. 
Although called haciendas, the coastal plantations were far more 
commercialized, being given to the production of goods for export 
or the large urban markets. Under these more fluid socioeconomic 
circumstances, the plantation workers, called yanaconas (after the 



103 



Peru: A Country Study 



Incan class of serfs called yanas), who permanently resided on the 
estates, also had access to subsistence plots. Moreover, they usually 
had "company" housing, schools, and access to other facilities speci- 
fied under a signed labor contract often negotiated through worker 
unions. 

Nevertheless, there were lingering connections to the highland 
manorial system. Because plantation crops, such as sugarcane and 
cotton, require a large labor force for harvests and planting, work- 
ers are seasonally recruited from the highland peasantry for these 
tasks. In some instances, owners of coastal plantations also pos- 
sessed highland estates from which they might "borrow" the needed 
seasonal workers from among the colonos they already controlled 
in peonage and pay them virtually nothing. In most cases, however, 
the coastal plantations simply hired gangs of peasant farmers for 
the short term, using professional labor contractors to do the job. 
For thousands of young men, this became an important first ex- 
perience away from their family and village, serving as a rite of 
passage into adulthood. It also constituted an important step for 
many in developing the labor and life skills needed to migrate per- 
manently to the coast. Employment on the coastal plantations 
offered the highland farmer the opportunity to use mechanized 
equipment and different tools, observe agricultural procedures 
guided by scientific principles and experts, and work for wages that 
greatly surpassed what he might earn in the villages. For most farm 
workers, it was the only chance to actually accumulate money. 

Elites 

Concentrated in the provincial, departmental, and national cap- 
itals, Peru's upper class was the other side of the coin of peonage. 
The Quechua or Aymara native population was powerless, sub- 
missive, and poor; the Hispanics were the regional and national 
elites, dominant, and wealthy. The inheritors of colonial power 
quickly reaffirmed their political, social, and economic hegemony 
over the nation even though the Peruvian state itself was a most 
unstable entity until the presidency of Ramon Castilla. They con- 
tinued to strike the posture of conquerors toward the native peo- 
ples, justifying themselves as civilized, culto (cultured), and urbane, 
as well as gente decente (decent people), in the customary phrase of 
the provincial town. Such presumption of status is a powerful but 
unwritten code of entitlement. It permits one to expect to have obe- 
dient servants, to be deferred to by those of lesser station, and to 
be the first to enjoy opportunity, services of the state, and whatever 
resources might be available. 



104 



The Society and Its Environment 



The modern national upper classes of Peru are today a more 
diverse population than was the case even at the end of the 
nineteenth century. They have remained essentially identified with 
the Costa, even though they have controlled extensive property in 
the highlands and Selva. Nevertheless, these elites are highly con- 
scious of class integrity; social life unfolds in the context of private 
clubs and specialized economic circles. The predilection of the 
upper-class families to show the strength of their lineages is revealed 
not only in the use of full names, which always contain both one's 
father's and mother's last names in that order, but also the apellidos 
(last names) of important grandparental generations. Thus, maga- 
zine society pages report names like Jose Carlos Prado Fernandini 
Beltran de Espantoso y Ugarteche, in which only Prado is the last 
name in the American sense. Use of the family pedigree to demon- 
strate rank is common among the elite when the names are clearly 
associated with wealth and power. 

As Peruvians have become more cosmopolitan, foreign names 
from Britain, Italy, Austria, and Germany have appeared with in- 
creasing frequency among those claiming upper-class credentials, 
leading to the conclusion that it is easier to reach elite status from 
outside Peru than to ascend from within the society. There are, of 
course a number of families who can trace their lineages to the colo- 
nial period. However, families of nineteenth- and early twentieth- 
century immigrants constitute about 40 percent of Peru's most elite 
sector, indicating a surprising openness to cosmopolitan mobility. 
In a 1980s list of Peru's national elite containing over 250 family 
names, for example, only one of clearly Quechua origins could be 
identified. 

The racial composition of the upper class is predominantly white, 
although a few mestizos are represented, especially at regional levels. 
The social structure of the country follows a Lima-based model. 
The national upper class is located almost exclusively in the province 
of Lima; the second stratum of elites is provincial, residing in the 
old principal regional cities, such as Arequipa, Trujillo, and Cusco, 
but not in Huancayo, Chimbote, or Juliaca, whose populations 
are predominantly of highland mestizo and cholo origins. Upper- 
class status in provincial life generally does not equate with the same 
levels in Lima, but rather to a middle level in the national social 
hierarchy. 

Traditionally, the upper classes based their power and wealth 
on rural land ownership and secondarily on urban industrial forms 
of investment. This situation has changed in part through the rise 
of business, industry, banking, and political opportunities, and also 
because of the Agrarian Reform Law of 1969, which forced dramatic 



105 



Peru: A Country Study 



changes in land tenure patterns. It was, however, a change as 
difficult to make as any that could be imagined: the fabled landed 
oligarchy greatly feared any alterations in its property rights, which 
included the colonos and yanaconas attached to both highland and 
coastal estates. Their control over Peru's power, purse, and peasan- 
try bordered on the absolute until the second half of the twentieth 
century, when the great highland migrations took hold of coastal 
cities and industrial growth exploded. Ensuing social and political 
demands could no longer be managed from behind the traditional 
scenes of power. 

Vested interests of the landed upper class were ensconced in the 
National Agrarian Association (Sociedad Nacional Agraria — SNA). 
Until the first government of Fernando Belaunde, it had been im- 
possible to discover just what the property and investment interests 
of this group were because government files on these subjects were 
closed and, indeed, had never been publicly scrutinized. All of this 
changed abruptly after the peasant land invasions of estates in 1963, 
when the need for solutions overcame the secrecy. In 1966 eco- 
nomic historian Carlos Malpica Silva Santisteban identified the 
landed oligarchy as a relatively small group, with 190 families own- 
ing 54 percent of the irrigated coast and 36 families or persons hold- 
ing 63 percent of titled land in the Selva, for a total of over 3 million 
hectares. In the highlands, the data were similar in content but 
hard to verify. 

Although upper-class wealth was founded on rural properties, 
it is evident that elite urban, mining, and industrial interests were 
also extensive. An indefatigable compiler of data on Peru's elites, 
Malpica annotated an extensive catalog of modern business and 
banking concerns showing the concentration of economic control 
in the hands of a tiny group of elite families, many being familiar 
traditional members of the oligarchy, now deprived of their land 
base by the agrarian reform. Of the seventy-nine families holding 
significant blocks of shares in the twelve principal insurance and 
banking operations in 1989, almost 50 percent were descended from 
the aforementioned European immigrant groups. Despite this Euro- 
centric trend, descendants of Japanese and Chinese immigrants 
have also entered the economic elites, if not with the equivalent 
social status. At least one Chinese-Peruvian family, which holds 
substantial banking, commercial, and industrial investments, de- 
scends from immigrants who arrived as indentured laborers in the 
nineteenth century. 

Military Classes 

The militarily connected population has developed into a sig- 
nificant national sector. Playing an ever more important social role, 



106 



The Society and Its Environment 



the military (los militares) has, in effect, emerged as a subsociety. 
Its special attributes and arrangements set it apart from other so- 
cial classes as a powerful special interest elite, with its own allegi- 
ances and identity, sense of mission, and objectives developed in 
coherent, relatively independent ways from other national policy 
and planning processes. No other groups within the population, 
with the possible exception of the cabals of the oligarchy, can be 
so characterized. 

The people involved in ancillary activities probably approach 
1 million, or 4 percent of the nation's population. Included in these 
activities were military industries, medical services, civilian busi- 
ness managers and employees, service and maintenance person- 
nel, and members of family networks who benefitted from having 
one of their number in the armed forces. The military domain com- 
mands 20 percent of central- government expenditures, 5 percent 
more than education, the next largest share of the national budget, 
and much more than health services, which claimed 5.8 percent 
in 1988. Indeed, Peru's military expenditures of US$106 per cap- 
ita exceeded three times the average expenditure per capita of all 
other South American nations in 1988. Over a twenty-year period, 
between 1972 and 1992, the military budget gained 38 percent in 
its share of the national budget, whereas education dropped by 35 
percent and health gained by less than 5 percent. 

Professionalization has involved areas that few have analyzed 
but that constitute the major reward system for professional career 
officers and noncommissioned personnel. These are the elaborate 
infrastructure and exclusive services for personnel and their fami- 
lies, including beach resorts and hotels, consumer discount cooper- 
atives, casinos and clubs, schools of several types and levels, 
hospitals and general medical services, insurance coverages, recrea- 
tional facilities, and a variety of other programs. In addition, there 
are extensive housing subdivisions in Lima for the officer corps 
and other military employees, named for the military branches that 
they serve. Members of the military also benefit from special retire- 
ment provisions and a plethora of other benefits that are unavail- 
able to others in the society at large. 

The sphere of military activities includes an extremely active in- 
ternal social calendar of commemorative events that bond the mem- 
bers and their families more tightly to group interests. In sum, the 
Peruvian military constitutes a virtually encapsulated society within 
the larger one and competes with advantage for the public funds 
vis-a-vis other interests by operating its own industries, sponsor- 
ing its own research and advanced study, and engaging in civic- 
action programs that often replicate the assigned work of civilian 



107 



Peru: A Country Study 

institutions, such as the Ministry of Agriculture. Consequently, 
the ubiquitous and well-established institutions of military society 
pervade Peruvian life at every turn and are regarded with skepti- 
cism by many who see them as depriving civilian needs of essen- 
tial resources (see also The Armed Forces in Society and Politics, 
ch. 5). 

Urban Classes 

Between the extremes of wealth and power represented by the 
white upper class and the native caste is the predominantly mestizo 
and cholo population, which largely comprises the lower and mid- 
dle sectors of rural and urban society. These are the most numer- 
ous and diverse sectors, constituting the core of Peruvian national 
society in culture, behavior, and identity. Together, these sectors 
include a wide range of salaried working-class families, persons in 
business and commercial occupations, bureaucrats, teachers, all 
military personnel (except those related to elite families), medical, 
legal, and academic professionals, and so forth. In terms of occu- 
pation, residence, education, wealth, racial, and ethnic consider- 
ations, the population is diverse, with few clear-cut markers 
differentiating one segment from another. Yet, there are obvious 
differences among the regions of the country that combine with 
those indicators to suggest a person's social position in relation to 
others. The importance of the regions derives from the fact that 
the urban and rural areas of the Sierra are, as a whole, measur- 
ably poorer than the Costa and Selva, and the various occupational 
groups less well-off in proportion. As in the case of the provincial 
upper class, being middle class in the regional context does not 
necessarily mean the same thing in the capital, although being 
marked as lower class would translate to the same category in Lima 
or Trujillo. 

An important study by anthropologist Carlos E. Aramburu and 
his colleagues in 1989 provides a graphic outline of how levels of 
living vary throughout the nation. Analyzing the 1981 census, they 
ranked the 153 provinces on the basis of five variables: the propor- 
tion of households without any modern household appliance; the 
average per capita income; the percentage of illiterate women over 
fifteen years of age; the number of children between six and nine 
years of age who regularly worked; and the rate of infant mortal- 
ity. These indicators were representative of involvement in the econ- 
omy, participation in state-operated institutions, and access to health 
services, each of which is critical for marking advances in the level 
of living from the perspective of the modern state. Only nine of 
the 100 highland provinces were represented among those in the 



108 



The Society and Its Environment 



top two levels of wealth, and only Arequipa was in the top rank. 
In contrast to the Selva provinces, which lacked any rank, eigh- 
teen of the twenty-eight coastal provinces registered in the top third 
of provinces according to wealth. At the other end of the scale, all 
but three of the poorest fifty-three provinces with 20 percent of the 
population were in the highlands, and none were on the coast. These 
data, when juxtaposed with the distribution of monolingual 
Quechua and Aymara speakers, confirm the poverty status of Peru's 
native population at the bottom of the socioeconomic scale. 

Thus, the provincial upper classes, with few exceptions, do not 
equate with the Lima-based national elite, whose socioeconomic 
position is vastly enhanced by their status as Lima residents and, 
subsequently, by their international connections. The same can 
be said for the other middle and lower sectors of the provincial popu- 
lation in comparison to Lima. In a very real sense then, Peru has 
two levels of class structure layered in between the national extremes 
of the oligarchic elites and the rural native peasantry: one in the 
context of Lima's primacy, the other with reference to the rest of 
the nation. 

Although the role of racial phenotypes and associated ethnic be- 
haviors is clearly seen at the extreme poles of Peruvian society, 
it is somewhat obscured in the middle sectors. In general, the more 
closely one approximates the ideal of Euro-American appearance, 
the greater the social prestige and status derived. On the other hand, 
Peru is a country whose majority population is darker skinned, with 
distinctive facial and bodily features. The varied shades of mean- 
ing attached to the designations mestizo and cholo are as much socio- 
economic and cultural in import as they are racial. Thus, in the 
Peruvian vernacular phrase, "money whitens" one's self-concept 
and expectations. 

With other non-native groups, such as the Japanese, Chinese, 
and Afro-Peruvians, status and class considerations are structured 
somewhat differently, yet exhibit the same tendencies toward ethno- 
racist marking. Just how strongly stereotypes have prevailed over 
facts was witnessed by the 1990 presidential election of the Japanese- 
Peruvian Alberto Fujimori, who was constantly referred to as el 
chinito (the little Chinaman). Racial terms are frequently employed 
in normal discourse in ways that many foreigners find uncom- 
fortable. Afro-Peruvians are referred to as zambos negritos, or more 
politely as morenos (browns). In many instances, this terminology 
implies behavioral expectations and stereotypes, and yet in others 
the same term is simply used as an impartial means of descrip- 
tion. 



109 



Peru: A Country Study 

Aspects of Family Life 

Much has been said about kinship and family in Latin Amer- 
ica. The ' 'Peruvian family" is of course not a homogeneous en- 
tity, but rather reflects both ethnic and socioeconomic factors. If 
there is a generalization to be made, however, it is that families 
in Peru, no matter what their status, show a high degree of unity, 
purpose, and integration through generations, as well as in the 
nuclear unit. The average size for families for the nation as a whole 
is 5.1 persons per household, with the urban areas registering 
slightly more than this and, contrary to what might be expected, 
rural families, especially in the highlands, being smaller, with a 
national average size of 4.9 persons. This apparent anomaly runs 
counter to the expected image of the rural family because the high- 
land families that constitute the bulk of rural households have been 
deeply affected by the heavy migration of their members to the cit- 
ies, coastal farms, and Selva colonizations. 

The roles of the different family members and sexes tend to fol- 
low rather uniform patterns within social class and cultural con- 
figurations. In terms of family affairs, Hispanic Peruvian patterns 
are strongly centered on the father as family head, although women 
increasingly occupy this titular role in rural as well as urban areas. 
Women serve as family heads in 20 percent of all households. As 
is the pattern in other countries, women have increasingly sought 
wage and salaried work to meet family needs. This, coupled with 
the fact that social and economic stress has forced a departure from 
the traditional model of male-centered households, means that the 
patriarchal family is gradually losing its place as the model of fam- 
ily life. Contributing to these changes is the neolocality of nuclear 
families living in cities, that is, located apart from the families of 
either spouse, and the loss of male populations in rural areas through 
migration and various poverty-related conditions that lead men to 
abandon their families. Families are patricentric, and the male head 
of household is considered the authority. His wife respects his posi- 
tion, yet exercises considerable control over her own affairs with 
respect to property and marketing. This gender and lineage hier- 
archy is to be seen as families walk single-file to market, each carry- 
ing their bundles, the husband leading the way, followed by his 
wife and then the children. 

In many Quechua communities, the ancient kinship system of 
patrilineages (called kastas in some areas) survives. It is thought 
to have been the basis for the Incaic clan village, the ayllu (see Glos- 
sary). In a patrilineal system, wives belong to their father's lineage 
and their children to their father's side of the family tree. This 



110 



Aymara woman, with daughter, 
filling a cantara in Plateria, 
a village near Puno 
Courtesy Inter-American 
Development Bank 



practice differs from the Hispanic system, which is bilateral, that 
is, includes one's mother's kin as part of the extended family, as 
in the British system. If native Americans follow a patrilineal sys- 
tem, families are at odds with the formal requirement of Peruvian 
law, which demands the use of both paternal and maternal names 
as part of one's official identity, thus forcing the bilateral pattern 
on them. 

In many Hispanic mestizo homes, fathers exercise strong au- 
thoritarian roles, controlling the family budget, administering dis- 
cipline, and representing the group interest to the external world. 
Mothers in these homes, on the other hand, often control and 
manage the internal affairs in the household, assigning tasks to chil- 
dren and to the female servant(s) present in virtually every urban 
middle- and upper-class home. For children school is de rigueur, 
and the more well-to-do, the more certain it is that they attend a 
private school, where the educational standards approach or equal 
good schools in other countries. The home is prized and well-cared 
for, with patios and yards protected by glass-studded walls and, 
in recent years, by electrical devices to keep out thieves. 

The lower-class household in the urban areas — such as Lima, 
Trujillo, or Arequipa — presents the other side of this coin. In 
metropolitan Lima, 7 percent of the population lives in a tugurio 
(inner-city barrio) and 47 percent in a squatter settlement. In 1990 
the older pueblos jovenes erected in the 1950s had the look of concrete 



111 



Peru: A Country Study 



middle-class permanency, with electricity, water, and sewerage. 
The newer invaded areas, however, had a raw and dusty look: hous- 
ing appeared ramshackle, made of bamboo matting (esteras) and 
miscellaneous construction materials scrounged from any available 
source. Here, as in the tugurios, the domestic scene reveals a con- 
stant scramble for existence: the men generally leave early in the 
morning to travel via long bus routes to reach work sites, often 
in heavy construction, where without protective gear, such as hard 
hats or steel-toed shoes, they haul iron bars and buckets of cement 
up rickety planks and scaffolding. With an abundance of men 
desperate for work, modern buildings are raised more with inten- 
sive labor than machinery. 

Women's roles in the squatter settlements cover a wide variety 
of tasks, including hauling water from corner spigots and begin- 
ning the daily preparation of food over kerosene stoves. In the 
1975-91 period, the food supply for substantial numbers of the 
urban lower class in Lima and other coastal cities came from the 
United States Food for Peace (Public Law 480) programs ad- 
ministered by private voluntary organizations. Women also keep 
their wide-ranging family members connected, seeking the food 
supply with meager funds, and doing various short-term jobs for 
cash. According to social scientist Carol Graham, the poor urban 
areas have a high percentage of female-headed households, as well 
as a large number of abandoned mothers who are left with the full 
responsibility for supporting their households and raising the 
children. 

Urban Informal Sector 

In 1990 the vast "informal sector" (see Glossary) of Lima's econ- 
omy was the most striking feature of its commercial life. There, 
91 ,000 street vendors, 54 percent of them women, sold food in the 
streets or public squares of central Lima or the residential area of 
Miraflores, the upscale mecca of the city. Street vendors have been 
a part of Lima life and culture since early colonial times, and the 
city government has persistently attempted to remove them to fixed 
market places. Nevertheless, street commerce in Lima through- 
out the colonial period and until the twentieth century was gener- 
ally regarded as a colorful, folkloric aspect of urban life and was 
often depicted in period paintings and descriptions. Since the great 
migrations began in the early 1950s, however, the city elites have 
come to disdain the street vendors who swarm over the Rimac 
Bridge every afternoon. As Hernando de Soto has abundantly 
documented in El otro sendero (The Other Path), this freewheeling 
entrepreneurial sector of the labor force was, in the 1980s, producing 



112 



The Society and Its Environment 



the equivalent of almost 40 percent of the national income. As "un- 
registered" business, this activity is outside the control of the na- 
tional economic institutions, whose cumbersome and often corrupt 
bureaucratic regulations stifle initiatives, especially if one lacks 
resources to pay all the bribes and formal start-up costs. In the cir- 
cumstances of 1991 , the public need to participate in the economy 
had, in essence, neutralized and bypassed the official system (see 
Nonparty Organizations, ch. 4). 

Domestic Servants 

The urban middle-class family without servants is incomplete. 
Although household servants constitute a major element in the 
urban informal economic sector, they are rarely analyzed as part 
of it. The retaining, training, disciplining, or recruiting of domes- 
tic help is constantly in progress under the supervision of the wife 
of the household head. One of the most common sights in Lima 
is therefore the small printed sign in front of houses reading "Se 
necesita muchacha" ("girl needed"). 

There is a constant flow of young highland migrant women to 
urban areas, and a very large portion of them seek domestic posi- 
tions on first arriving in Lima. Although census figures were dated, 
it appeared that about 18 percent of all women employed in 
metropolitan Lima in 1990 were domestic servants. Domestic ser- 
vice work of course pays poorly, and social and sexual abuse ap- 
pear often to accompany such employment. Nevertheless, in the 
absence of other alternatives, migrant women find these jobs tem- 
porarily useful in providing "free" housing and a context for learn- 
ing city life, while also having some opportunity to attend night 
school to learn a profession, such as tailoring or cosmetology, two 
of the more popular fields. As domestic work has been increasingly 
regulated, the term empleada (employee) has begun to replace the 
use of muchacha as the term of reference. Over the 1960-91 period, 
households have been obliged to permit servants to attend school 
and to cover other costs, such as social security. 

Godparenthood 

Family life at all levels of society is nourished by an ample number 
of ceremonial events marking all rites of passage, such as birth- 
days, anniversaries, graduations, or important religious events, such 
as baptisms, confirmations, and marriages. Family life is thus 
marked by small fiestas celebrating these events and passages. In 
this context, Peruvians have greatly elaborated the Roman Catholic 
tradition of godparenthood (padrinazgo) to encompass more occa- 
sions than simply celebration of the sacraments of the church, 



113 



Peru: A Country Study 



although following the same format. The parties involved include 
the child or person sponsored in the ceremony, the parents, and 
the godparents, who are the sponsors and protectors. The primary 
relationship in this triad is between the godchild (ahijado) and the 
godparents (padrinos). The secondary bond of compadrazgo (see Glos- 
sary) is between the parents and godparents, who after the ceremony 
will forever mutually call each other compadre or comadre. For the 
child, the relationship with the godparents is expected to be one 
of benefit, with the padrinos perhaps assisting with the godchild's 
education, finding employment, or, at the least, giving a small gift 
to the child from time to time. For the compadres, there is the ex- 
pectation of a formalized friendship, one in which favors may be 
asked of either party. 

Ritual sponsorship has two dimensions with respect to its im- 
portance to family and community. On the one hand, the mechan- 
ism can be utilized to solidify social and family relations within 
a small cluster of relatives and friends, which is generally the case 
for families concerned with enclosing their social universe for var- 
ious reasons. Among the top upper class, it may provide a way 
of concentrating power relations, business interests, or wealth; 
among the native caste, the inward selection of compadres may fol- 
low the need to protect one's access to fields or to guarantee a debt. 
On the other hand, many families deliberately choose compadres from 
acquaintances or relatives who can assist in socioeconomic advance- 
ment. In this fashion, the original religious institution has lent it- 
self to social needs in a dynamic and flexible manner. In the more 
closed type of community setting, there are only five or six occa- 
sions for which godparents are selected; among more socially mo- 
bile groups, there may be as many as fifteen or more ways in which 
a family may gain compadres. Thus, it would not be unusual for 
the parents of a family with four children to count as many as forty 
or more different compadres. In a more conservative setting, the num- 
ber might be less than ten for a similar family. 

Rural Family and Household 

Andean peasants, often maligned by those who discriminate 
against them as being lazy and poor workers, are the reverse of 
the stereotype. The peasant family begins its day at dawn with the 
chores of animal husbandry, cutting the eucalyptus firewood, fetch- 
ing water, and a plethora of other domestic tasks. Field work be- 
gins with a trek to the often distant chacras, which may be located 
at a different altitude from the home and require several hours to 
reach. In instances where chacras are very distant from the home, 
farmers maintain rough huts in which to store tools or stay for 



114 



Baptism of a child 
in a Lima church 
Courtesy Paul L. Doughty 




several days. Andean peasants of all ages and both sexes lead 
rigorous lives, hustling about steep pathways carrying loads of fire- 
wood, produce, and tools on their backs. 

Although horses and mules are of greater market value than 
burros, they are more expensive to maintain, and thus burros are 
the most common beasts of burden in most of the highlands. Na- 
tive Andean llamas and alpacas are commonly found in the cen- 
tral and southern Andes, where they are still widely used for 
transport, wool, and meat. Peasant women and girls, although 
carrying a burden, perpetually keep their hands at work spinning 
wool to be handwoven by local artisans into clothing, blankets, and 
ponchos. Although there are few who approach full self-sufficiency 
in the Andes (and none on the coast), the Andean peasants make, 
repair, invent, and adapt most of their tools; they also prepare food 
from grain they have harvested and animals they have raised and 
butchered. 

Although modern amenities and appliances have found their way 
into most nonfarm households, the rural poor by necessity must 
conduct their affairs without these instruments of pleasure and work. 
Even though consumer items — such as electric irons, blenders (es- 
pecially useful for making baby food), televisions, and radiocassette 
tape players — are keenly desired, surveys have shown that 25 per- 
cent of all Peruvian households possess none of these things. The 
great majority of households (more than 50 percent) lacking modern 



115 



Peru: A Country Study 

appliances were in the rural areas of the Andes. The contributions 
of many hands, therefore, are vital to the rural economy and house- 
hold. The same survey by Carlos Aramburu and his associates also 
showed that the poorest and most rural areas were also the provinces 
that in demographic terms had the highest dependency ratios (the 
largest number of persons — the very young and the aged — who 
were only limited participants in the labor force). Consequently, 
the loss of youth to migration cuts deeply into the productive ca- 
pacity of hundreds of families and their communities. In those dis- 
tricts in the central highlands especially, where the Shining Path 
has been active since the early 1980s, the absolute decline in work 
force numbers has left a third of the houses empty, fields in per- 
manent fallow, and irrigation works in disrepair, losses which Peru 
could ill afford in view of its declining agricultural production and 
great dependency on imported foodstuffs, even in rural areas. 

These demographic changes also threaten other community and 
family institutions like the use of festive and exchange-labor sys- 
tems {minka and ayni, respectively) that have been such an integral 
part of the traditional peasant farm tradition. The minka involves 
a family working side by side with relatives and neighbors to plant 
or harvest, often with the accompaniment of musicians and always 
with ample basic food supplied by the hosts. On some occasions, 
invited workers may request token amounts of the harvest. Ex- 
change labor, or ayni, is the fulfillment of an obligation to return 
the labor that someone else has produced. The communities of 
peasant farmers, whether native or cholo, utilize these mechanisms 
to augment family labor at critical times. Minka work crews, 
however, are often inefficient and overly festive, and their hosts 
are unable to keep activities task-oriented on a late afternoon. As 
a consequence, farmers who are mainly concerned with monetary 
profitability, tend to utilize paid temporary workers instead of the 
minka, whose ceremonial aspects are distracting. On the other hand, 
the purpose of the minka is obviously social and communal, as well 
as economic. Family economic activity in rural communities has 
invariably relied primarily on unpaid family labor, augmented by 
periodic cooperative assistance from relatives and neighbors to han- 
dle larger seasonal tasks. 

Community Life and Institutions 

The importance of developing and maintaining effective in- 
tracommunity relationships underlies many of the kinship tradi- 
tions that are universal in Andean and Peruvian family life in small 
towns. Throughout the Andes, there has been a constant need for 
peasants to retain strong interpersonal and family bonds for 



116 



The Society and Its Environment 



significant socioeconomic reasons. For centuries the peasantry 
suffered the constant loss of land until the Agrarian Reform Law 
of 1969 reversed the pattern. The stronger a community is tied 
together, the greater has been its ability to defend its interests against 
usurpers, a fact often shown in ethnographic studies throughout 
the region. 

By practice and reputation, Andean villages and towns often 
enjoy reputations for cohesiveness, community action, and the good, 
simple life. The tight social relationships in Peru's towns and vil- 
lages, peasant communities, and small cities, however, are not 
necessarily based on "rural" or agricultural needs and a positive 
community spirit. Even in small populations where everyone knows 
everyone else, or knows about them, there can be marked ethnic 
and social class differences and rivalries that afford many oppor- 
tunities for disagreement and feuds. Although people share their 
culture, values, and participation in a community, family interests 
often clash over property ownership and chacra boundaries, local 
politics, and any of the myriad reasons why people might not like 
each other. Thus, small town life can be difficult when conflicts 
erupt: "pueblo chico, infierno grande" ("small town, big hell") 
is the expression used. There are, therefore, two contradicting 
images of small town life: one bucolic, tranquil, and good natured; 
the other, petty and conflictive. Both images are rooted in fact. 

Catholicism and Community 

Like many Latin American nations, Peru's predominant religion 
is Roman Catholicism, which after 460 years has remained a power- 
ful influence in both state affairs and daily activities. Church ac- 
tivities and personnel are, of course, centered in Lima, and the 
cathedral is symbolically located on the east side of the Plaza de 
Armas to one side of the National Palace and the Municipality of 
Lima, which occupy the north and west quarters, respectively, of 
the central square from which all points in Peru are measured. The 
ceremonial functions of the state are integrated into the rites of the 
church, beginning with the inauguration of the president with high 
mass in the cathedral, Holy Week events, and the observances of 
major Peruvian saints' days and festivals, such as that of Santa 
Rosa de Lima (Saint Rose of Lima) and others. The institutional 
role of the church was established with conquest and the viceroy alty, 
but since independence it has slowly declined through losing its 
exclusive control over the domains of education, maintenance of 
vital statistics, marriages, and the organization of daily life around 
church rites. Nevertheless, the ceremonial aspects of the Catholic 
religion, moral dictates, and values are profoundly embedded in 



117 



Peru: A Country Study 

Peruvian culture; parish priests and bishops play active roles in 
local affairs where they are present. 

The policies of the church historically have been considered as 
very conservative, and the various parishes and bishoprics were 
great landlords, either managing their properties directly or rent- 
ing them to other elites. Church districts with such properties were 
eagerly sought by ambitious clergy, many of whom even gained 
dubious reputations as hacendados (see Glossary). Throughout the 
highlands, the priesthood actively carried the colonial legacy in its 
dealings with the Quechua and Aymara peoples until the decade 
of the 1950s, when many foreign priests, notably the Maryknolls 
in Puno, began introducing substantial changes in these traditional 
patterns. Part of this development resulted in the emergence of a 
strongly populist and social activist theme among many clergy, such 
as Gustavo Gutierrez, whose 1973 book, A Theology of Liberation, 
was perhaps to have greater political impact outside of Peru than 
in it. The changes, however, were considerable, and many priests 
and nuns worked to assist the poor in ways that marked a turnabout 
in both style and concept of duty from a short generation before. 
Although the Peruvian priesthood has been thus invigorated, the 
church remains unable to fill a large percentage of its parishes on 
a regular basis, in part because of the demand for clergy in Lima 
and the other coastal cities. 

Roman Catholicism, as the official state religion, has played a 
major role in Peruvian culture and society since conquest, with 
every village, town, and city having its official church or cathedral, 
patron saint, and special religious days, which are celebrated an- 
nually. These kinds of activities are focal events for reaffirming 
social identity and play key roles in the life of all types and sizes 
of community. Participation in these events is spurred by both re- 
ligious devotion and desire to serve in community functions for 
prestige and perhaps political purposes. The most notable of these 
activities are the patronal festivals that each settlement annually 
celebrates. Costs for these affairs vary greatly, depending on the 
size of the town or community. In the case of large cities like lea 
or Cusco, expenses are impressive. To underwrite the costs, local- 
ities have each developed their own methods of "taxation," 
although none would call it that. The most common method is to 
obtain "volunteers," who agree to serve as festival sponsors, called 
mayordomos (see Glossary), who can enlist their family members to 
aid in the work of organizing and paying for community-wide 
celebrations. In small places, the mayordomo and his or her family 
may handle the costs within the group, even going into debt to 
do things properly. In large towns and cities, the festivals are often 



118 



A colonial church in Ayacucho 
Courtesy Embassy of Peru 



sponsored by the municipal government as well as the church, with 
mayordomos serving in only limited capacities. In many towns, there 
is a religious brotherhood (hermandad) or other organization that 
also takes part in this fashion. Peru's largest religious celebration, 
the Sefior de los Milagros, which takes place in Lima during the 
month of October each year, is largely funded by the brotherhood 
of the Sefior de los Milagros. 

In communities that maintain strong native cultural traditions, 
Roman Catholicism is intricately mixed with facets of Incan be- 
liefs and practices. The native populations hold firm animistic no- 
tions about the spirits and forces found in natural settings, such 
as the great snowpeaks where the apus (lords of sacred places) dwell. 
Many places are seen as inherently dangerous, emanating airs or 
essences that can cause illness, and are approached with care. The 
Incas and other Andean peoples revered the inti (sun) and pacha 
mama (earth mother), as well as other gods and the principal an- 
cestral heads of lineages. The Spaniards, in converting the people 
to Catholicism, followed a deliberate strategy of syncretism that 
was used throughout the Americas. This process sought to substi- 
tute Christian saints for local deities, often using existing temple 
sites as the location of churches. Many of the biblical lessons and 
stories were conveyed through dramatic reenactments of those 



119 



Peru: A Country Study 

events at fiestas that permitted people to memorize the tales and 
participate in the telling. Thousands of Andean fiestas are based 
on such foundations. 

The annual celebrations of village patron saints' days often coin- 
cide with important harvest periods and are clearly reinterpreta- 
tions of preconquest harvest observances disguised as Catholic feast 
days. In the south highlands, among such pastoral peoples as those 
of Q'eros, Cusco preserves many ancestral practices and lifeways. 
Elaborate rites to promote the fertility of their llama and alpaca 
herds are still undertaken. In other communities, religious rites 
that evoke natural and spiritual forces require sacrifices of animals, 
such as llamas or guinea pigs, the spillage of chicha or alcohol on 
sacred ground, or the burying of coca and other ritual items to please 
the apus or the pacha mama. In numerous highland areas, the Spanish 
introduced the Mediterranean custom of blood sports, such as bull- 
fighting, bullbaiting, and games of horsemanship in which riders 
riding at full gallop attempt to wring the necks of fowl or condors. 
Jose Maria Arguedas recounts these practices in his famous 1941 
novel, Yawar Fiesta. 

Andean religious practices conform to the sociocultural divisions 
of Peruvian society, with the Hispanicized coastal cities following 
general Roman Catholic practices, and the Andean towns and vil- 
lages reflecting the syncretisms of conquest culture, which endure 
as strong elements in modern belief and worldview. The impor- 
tance of these events is considerable because they evoke outpour- 
ings of devotion and emotional expressions of belief, while giving 
opportunity for spiritual renewal. They also function to tie the popu- 
lation together in their common belief and allegiance to the im- 
mortal figure of the saint, or apu, and thus constitute important 
bonding mechanisms for families and neighborhoods. From the 
major celebrations — such as those of two specifically Peruvian 
saints, Santa Rosa of Lima and San Martin of Porres (Saint Martin 
of Porres) — to the dozens of important regional figures, such as 
the Virgen de la Puerta (Virgin of the Door) in La Libertad Depart- 
ment and the revered saints and crosses in village chapels, these 
feast days have a singular role in social life. Indeed, not only do 
settlements have religious allegiances, but so, too, do public insti- 
tutions. For example, the armed forces celebrate the day of their 
patroness, the Virgen de las Mercedes (Virgin of the Mercedes — 
Our Lady of Ransom), with pomp and high-level participation 
around the country. 

Since about 1970, Protestantism has been winning converts in 
Peru at a relatively rapid rate among the urban poor and certain 
native populations (see The Church, ch. 4). Yet, Peruvians, like 



120 



The Society and Its Environment 



those in other Andean countries, have not been as receptive to Pro- 
testant entreaties to convert as have people in Central America. 
According to one study, only about 4.5 percent of Peruvians can 
be counted as Protestants, with the Church of Jesus Christ of Latter- 
day Saints (Mormons) forming about a quarter of the number and 
the rest belonging to various other groups. To many, the appeal 
of Protestantism comes in reaction to the kinds of ceremonial obli- 
gations that have accompanied Roman Catholic practice and the 
failure of the traditional church to address adequately the pressing 
issues that were problems among the poor. 

Most intensive Protestant missionary attention has been directed 
toward the tribal peoples of the Amazon Basin, where the Sum- 
mer Institute of Linguistics (SIL), Wycliffe Bible Translators, and 
similar evangelical groups have long worked. In particular, the SIL 
has occupied a peculiar position in Peru through its long-running 
contracts with the Ministry of Education to educate the numerous 
tribes, such as the Shipibo, and assist the government in develop- 
ing linguistically correct texts for several groups. Nevertheless, na- 
tionalistic public reaction to the SIL's activities has provoked many 
attempts to force the organization out of Peru. Because the force 
behind the evangelical movements emanates largely from the United 
States and because Roman Catholicism is the official state religion, 
there have been occasional hints of loyalist hostility with respect 
to zealous proselytizing. 

Catholic cults have also bloomed throughout Lima's squatter set- 
tlements. The role of religion and the fact that the people them- 
selves generate institutions of worship with relatively little external 
guidance is yet another expression of the migrants' striving for a 
sense of community in the difficult circumstances of Lima's squatter 
settlements. 

Community Leadership 

Throughout the highlands, there are vestiges of the colonial civic 
and religious organizations of "indirect rule" originally implanted 
by Spanish officials. Where they survive in Peru, principally in 
native communities, there are networks of villages tied together 
in an association broadly supervised by a parish priest or his sur- 
rogate. The village religious leaders, who are called by various 
names such as alcaldes peddneos (lesser mayors) and varayoq or en- 
varados (staff bearers), plan and carry out elaborate yearly festival 
cycles involving dozens of lesser special lay religious authorities. 
Often referred to as carrying a "burden" or responsibility {cargo), 
all of these village officials are selected annually by elaborate sys- 
tems of prestige rankings based on prior experience and local values 



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Peru: A Country Study 

of devotion, honesty, reputation for work, and capacity to under- 
write the costs of office. 

The principal officials in these hierarchies carry holy staffs of 
office, often made of chonta (tucuma) palm wood brought from the 
tropics and adorned with silver relics and symbols. The additional 
duties of the varayoq include the supervision of village morals, mar- 
riage, and the application of informal justice to offenders of vil- 
lage norms. Although specifically outiawed in several of Peru's older 
constitutions, the system has endured throughout the highlands. 
Changes have occurred, however, when communities, under pres- 
sures to modernize, abolished the varayoq institution. In other cases, 
the system has evolved into a more formal political apparatus, leav- 
ing the religious activities in the hands of the parish priest, lay 
brotherhoods, and other devotees. The multicommunity Peasant 
Patrols (rondas campesinas) in the highlands have acted as informal 
but powerful self-defense forces controlling rustling and, beginning 
in the 1980s, the intrusion of unwanted revolutionaries like the Shin- 
ing Path. In aspects of their orientation and organization, they may 
aspire to resemble the varayoq as moral authorities. 

The formal political and social organization of Peruvian towns 
and cities of course follows the outlines laid down in the constitu- 
tion of 1979 and various laws enacted by the Congress. One of 
the somewhat confusing arrangements, however, pertains to the 
officially constituted corporate community enterprises, the Peasant 
Communities, and their offshoots — such as the Social Interest 
Agrarian Association (Sociedad Agrfcola de Interes Social — SAIS) 
and the Social Property Enterprises (Empresas de Propiedad 
Social — EPS). There is disagreement over how these entities fit into 
the community and political picture because their constituencies 
overlap with the political divisions. The districts and provinces are 
political subdivisions with elected mayors and council members 
charged with administering their areas. Corporate communities 
are a form of agrarian cooperative business that own inalienable 
land, with memberships that are not necessarily restricted to a single 
residential unit like a town. 

The Peasant Communities and other units conduct their af- 
fairs through a president, as well as administrative and vigilance 
committees elected by the general assembly of the membership. 
Community property and members (comuneros) are within the 
administrative domains of districts and provinces for all other civic 
purposes. In some areas, the boundaries of the Peasant Commu- 
nities coincide with those of a district, as is frequently the case in 
the Mantaro Valley. In other areas, community lands occupy only 
a portion of the district; there may also be two separate Peasant 



122 



A street in the town of Huaraz, 
Ancash Department 
Courtesy Inter-American 
Development Bank 




Communities within a district, or districts with residents who do 
not belong to the corporate organization. 

Members of Peasant Communities and other corporate groups 
constitute about 30 percent of all rural people and therefore have 
been a significant factor in economic and political affairs through- 
out the highlands and in some areas of the Costa, where the former 
plantations passed into workers' hands after 1969. On the coast, 
there have long been linkages between worker unions and the 
regional political powers, but in the Sierra these ties have not de- 
veloped strongly. The exception is in the central highland depart- 
ment of Junin and in the southern department of Puno, where in 
the 1980s there were powerful, organized movements based on 
Peasant Communities and independent small farmers groups al- 
lied with political parties. The influence of these groups was, for 
the most part, localized. 

Landlords and Peasant Revolts in the Highlands 

In the great majority of highland provinces, political and eco- 
nomic leadership and power were based on traditional social elites, 
a landlord class that controlled the haciendas and, thus, very large 
proportions of the rural poor. In these contexts, powerful landlords 
(terratenientes) manipulated political affairs, either by themselves hold- 
ing positions of authority, such as the prefectures, municipal offices, 
and key government posts, or influencing those who did. A tradition 



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Peru: A Country Study 

of ruthlessness, greed, and abuse is associated with this system 
(gamonalismo) throughout Peru. A gamonal is a person to be feared 
because he has extraordinary and extralegal powers to protect his 
interests and act against others. Although the agrarian reform of 
1969 did much to cut this power, local affairs in many districts and 
provinces have remained under such domination, to the deep resent- 
ment of the rural poor, who most directly feel its consequences. 

Since the late nineteenth century, various regional movements 
have arisen to address abuse. Historian Wilfredo Kapsoli Escudero 
has documented thirty-two peasant revolts and movements from 
1879 to 1965, a number that is not exhaustive but which contradicts 
the view that Peru's native peasantry was passive in accepting its 
serfdom. Characteristically, virtually all of these efforts were spe- 
cifically directed against the abuses of gamonales and hacendados, 
at least in their initial phases. The forces in the 1885 Ancash up- 
rising, led by Pedro Pablo Atuspana, an alcalde peddneo from a vil- 
lage near Huaraz, eventually captured and held the Callejon de 
Huaylas Valley for several months before federal troops reclaimed 
it. 

Most peasant revolts were not as dramatic, but all testified to 
the burgeoning feelings of frustration, anger, and alienation that 
had built up over the centuries. In part, this anger and frustration 
stemmed from the fact that native American communities had been 
deprived of their communal holdings after national independence, 
which meant that extensive holdings passed from community con- 
trol to private elite interests. Demands for redress of this situation 
led to the reestablishment of the official Indigenous Community 
in 1920 during the second presidency of Augusto B. Leguia ( 1919— 
30). Subsequently, communities that could prove they at one time 
had held colonial title to land were permitted to repossess it, a long 
and arduous bureaucratic process in which the most successful com- 
munities were those with active migrants in Lima who could lobby 
the government. 

Another response was President Manuel A. Odna's (1948-56) 
sanctioning of the Cornell-Peru project in which the Ministry of 
Labor and Indian Affairs, in collaboration with Cornell Univer- 
sity in Ithaca, New York, would conduct a demonstration of com- 
munity development and land reform at Hacienda Vicos in Ancash 
Department, starting in 1952. It was Peru's first such development 
program and received extensive publicity around the country. This 
situation provoked consternation among landlords and elite in- 
terests, which purposefully delayed the conclusion of the project. 
The colonos of Vicos became an independent community in 1962, 



124 



The Society and Its Environment 



when they were finally permitted to purchase the estate they and 
their ancestors had cultivated for others for 368 years. 

With its widespread publicity, the Vicos project helped to whet 
appetites for change. At that time, several hundred hacienda com- 
munities like Vicos were requesting similar projects and the free- 
dom to purchase their lands. When the reluctant government of 
oligarch Manuel Prado y Ugarteche (1939-45, 1956-62) and the 
slow and corrupt mechanisms of the bureaucracy could not meet 
these rising demands, an explosive situation developed. Peasant 
invasions of hacienda lands began a few days after Fernando 
Belaunde assumed office as president in 1963. He had promised 
to organize a land reform, and the native communities, in their 
words, were "helping" him keep his word. Hundreds of estates 
were taken over by peasants, provoking a national crisis that even- 
tually subsided when Belaunde convinced communities that his ad- 
ministration would fulfill its promises. It did not happen. 

However, on the "Day of the Indian," June 24, 1969, General 
Juan Velasco Alvarado (president, 1968-75), head of the populist 
"Revolutionary Government of the Armed Forces," decreed a 
sweeping and immediate land reform, ending serfdom and private 
latifundios (see Glossary) that included the sacrosanct coastal plan- 
tations. Hope and expectations on the part of the peasantry had 
never been higher, but the succeeding years brought back the frus- 
tration; serious problems resulted from natural disasters, the with- 
drawal of significant international credit and support from the 
United States for reform programs, bureaucratic failures, and a 
lack of well-trained personnel. After the Velasco government gave 
way to more conservative forces within the army in 1975, a retrench- 
ment began. In this phase of the process, some haciendas, includ- 
ing several in Ayacucho Department, were returned to their former 
owners, provoking bitter disappointment and further alienation 
among the peasants. 

Shining Path and Its Impact 

The social history of the 1960s and 1970s is background for the 
emergence of the disturbing Shining Path (Sendero Luminoso — 
SL) movement. Its many violent actions have been directed against 
locally elected municipal officials and anyone designated as a gamonal 
in the departments of Ayacucho, Huancavelica, Apurimac, Junm, 
Huanuco, and portions of Ancash and Cusco departments, as well 
as some other areas designated as emergency zones where govern- 
ment control was deeply compromised. The Maoist-oriented SL 
opposed Lima as the metropolis that usurps resources from the rest 
of the nation. Like most past revolutionary movements (as opposed 



125 



Peru: A Country Study 

to peasant revolts) acting on behalf of the poor, the SL leadership 
has consisted of disgruntled and angry intellectuals, mestizos, and 
whites, apparently from provincial backgrounds. Many adherents 
have been recruited from university and high-school ranks, where 
radical politicization has been a part of student culture since the 
late nineteenth century. Others have come from the cadres of em- 
bittered migrant youths living in urban lower-class surroundings, 
disaffected and frustrated school teachers, and the legions of alien- 
ated peasants in aggrieved highland provinces in Huancavelica, 
Ayacucho, and adjacent areas. 

Peru's socioeconomic and political disarray has taken on its 
present pattern after four decades of extravagant demographic 
change, a truncated land reform that never received effective fund- 
ing or ancillary support as needed in education, and incessant 
promises of development, jobs, and progress without fulfillment. 
The SL has sought to eliminate the perpetrators of past error to 
establish a new order of its own. The SL's vengeful approach ap- 
peared attractive to many, coming at a time when the migration 
pathway to social change appeared blocked, the ability to progress 
by this method stymied by the economic crisis, and rural develop- 
ment was at an all-time low ebb. 

The immediate impact of the terror-inspiring violence of SL ac- 
tions and the correspondingly symmetrical responses of the Peru- 
vian Army (Ejercito Peruano — EP) has had a devastating effect 
on rural and urban life, public institutions, and agricultural produc- 
tion, especially in the emergency zone department of Ayacucho. 
Since the SL's first brutal attack on the defenseless people of 
Chuschi, its actions and the violent reactions of the police and army 
have produced chaos throughout the central highlands and deep 
problems in Lima. 

From 1980 to 1990, an estimated 200,000 persons were driven 
from their homes, with about 18,000 people killed, mostly in the 
department of Ayacucho and neighboring areas. In five provinces 
in Ayacucho, the resident population dropped by two-thirds, and 
many villages were virtual ghost towns. This migration went to 
Lima, lea, and Huancayo, where disoriented peasants were offered 
little assistance and sometimes were attacked by the police as 
suspected Senderistas (SL members). Many communities have 
responded to SL attacks by organizing and fighting back. Towns 
or villages in La Libertad and Cajamarca departments, in partic- 
ular, gready amplified the system of rondas campesinas. Elsewhere, 
the army organized local militias and patrols to combat and ferret 
out SL cadres. Unfortunately, in addition to providing for defense 
all of these actions left room for abuses, and there were numerous 



126 



A school scene in Cusco 
Courtesy Karen R. Sags tetter 

cases of personal vendettas taking place that had little to do with 
the task. 

There was no question that the SL's revolutionary terrorism was 
producing major disruptions and profound changes in Peruvian 
society. Surveys indicated that 71 percent of Peruvians agreed that 
poverty, social injustice, and the economic crisis were together the 
root cause of the SL's revolution, and that 68 percent identified 
the SL as the nation's most serious problem. Drug trafficking was 
ranked a distant second by only 1 1 percent of respondents. At least 
one conclusion, however, seemed abundantly clear: Peruvians had 
to address their longstanding and deeply interrelated ills of poverty, 
inequity, and ethnoracial discrimination if they hoped to take control 
of the situation. 

Education, Language, and Literacy 

The Education System 

In Peru schooling is regarded as the sine qua non of progress 
and the key to personal advancement. In 1988 there were over 
27,600 primary schools in Peru, one for virtually every hamlet with 
over 200 persons throughout the country (see table 7, Appendix). 
It is no exaggeration to say that the presence of a village school 



127 



Peru: A Country Study 

and teacher is considered by the poor as the most important first 
step on the road to ''progress" out of poverty and a state of dis- 
respect, if not for themselves, for their children. Because of the 
historical ethnic and racial discrimination against native peoples, 
the village school became the instrument and method by which one 
could learn Spanish, the most important step toward reducing one's 
"visibility" as an identifiable object of denigration and being able 
to gain mobility out of the native American caste. The primary 
school also has provided the means to become a recognized citizen 
because the exercise of citizenship and access to state services re- 
quire (in fact, if not officially) a basic ability to use written and 
spoken Spanish. Thus, the spread of primary schools owed much 
to the deep desire on the part of the native and rural poor to disas- 
sociate themselves from the symbols of denigration. The thrust of 
Peruvian education has been oriented toward this end, however 
subtiy or even unconsciously. School policies encouraged the dis- 
carding of native American clothing and language, and the fre- 
quent school plays and skits burlesqued native peoples' practices, 
such as coca chewing or fiestas, or equated indigenous culture with 
drunkenness and, often, stupidity and poverty, while at the same 
time exhorting native children to "lift themselves up." The oppo- 
site pole to being native American was to be Spanish-speaking, 
urban, white-collar, and educated. 

The influence of these educational policies is reflected in the cur- 
rents of social change sweeping Peru in the second half of the twen- 
tieth century. In the early 1960s, Peru was a nation where almost 
39 percent of the population spoke native languages, half being 
bilingual in Spanish and half monolingual in a native tongue. By 
1981 only 9 percent were monolingual, and 18 percent remained 
bilingual. In 1990 over 72 percent claimed to speak only Spanish, 
whereas in 1961, about 60 percent did. In 1990 Quechua was by 
far the dominant native language spoken in all departments, ex- 
cept Amazonas and Ucayali. Almost 80 percent of Aymara speak- 
ers lived in Puno, with many bilingual persons in Arequipa, greater 
Lima, Tacna, and Moquegua. About 85 percent of the popula- 
tion in 1991 was literate (see table 8, Appendix). 

There are many technical and cultural difficulties associated with 
gathering and reporting information on native languages. Because 
of this, most experts have concluded that native languages are sig- 
nificantly underreported with respect to bilingualism. According 
to one study, native languages are the preferred means of com- 
munication even within those households whose adult members are 
bilingual. However, given the force of state policy in education 



128 



The Society and Its Environment 



and the many concomitant pressures on the individual, Quechua 
and Aymara will likely survive largely as second languages. 

In the Sierra, where villages and communities are famous for 
their voluntary work, the majority of self-financed public commu- 
nity projects have been dedicated to the construction and main- 
tenance of their escuelitas (little schools) with little assistance except 
from their migrant clubs and associations in Lima or other large 
cities. This overwhelming drive to change personal, family, and 
community conditions by means of education began at least 150 
years ago, at a time when public education was extremely limited 
and private schooling was open to only the elite mestizo and white 
populations of the few major cities. In 1990, however, 28 percent 
of all Peruvians, over 5 million people, were matriculated in primary 
or secondary schools, which were now within reach of people even 
in the remotest of places. 

In the mid-nineteenth century, aside from a few progressive dis- 
tricts that operated municipal schools, most educational institutions 
were privately operated. Individual teachers would simply open 
their own institutes and through modest advertising gain a clien- 
tele of paying students. There have been laws mandating public 
education since the beginning of the republic, but they were not 
widely implemented. In 1866 the minister of justice and educa- 
tion sought to establish vocational schools and uniform curricula 
for all public schools and to open schools to women. The Constitu- 
tional Congress in 1867 idealistically called for a secondary school 
for each sex in every provincial capital. With constitutional changes 
and renewed attempts to modernize, it became the obligation of 
every department and province to have full primary and secon- 
dary education available, at least in theory, to any resident. Primary 
education was later declared both free and compulsory for all 
citizens. 

The Ministry of Education in Lima exercises authority over a 
sprawling network of schools for which it uniformly determines cur- 
ricula, textbook content, and the general values that guide class- 
room activities nationwide. Because of the importance invested in 
education, the role of the teacher is respected, especially at the dis- 
trict level, where teachers readily occupy leadership positions. Be- 
cause of this tendency, for many years teachers were prohibited 
from holding public office on the theory that they would, like priests, 
exercise an unusual level of influence in their districts. The power 
accruing to a teacher as the only person with postsecondary edu- 
cation in a small rural town can be considerable: the teacher is 
sought out to solve personal and village problems, settle disputes, 
and act as spokesperson for the community. Both men and women 



129 



Peru: A Country Study 



have eagerly sought teaching positions because they have offered 
a unique opportunity for personal advancement. In a nation steeped 
in androcentric traditions, however, teaching has been especially 
important for women because it has been an avenue of achieving 
upward mobility, gaining respect, and playing sociopolitical roles 
in community affairs that have been otherwise closed to them. 

Higher education is hence greatly respected. University profes- 
sors symbolize a high order of achievement, and they are addressed 
as profesor or profesora. The same recognition of educational achieve- 
ment is given to other fields as well. Anyone receiving an advanced 
degree in engineering is always addressed as engineer (ingeniero) 
or doctor. The titles are prestigious and valued and permanently 
identify one as an educated person to be rewarded with respect. 
The titles are therefore coveted, and on graduation the new status 
is often announced in El Comercio, Lima's oldest daily newspaper. 

In 1990, in addition to its primary schools, Peru counted over 
5,400 secondary schools (colegios) of all types. Although these too 
were widely distributed throughout the country, the best secon- 
dary schools were heavily concentrated in the major cities and es- 
pecially in Lima. There, the elite private international institutions 
and Peruvian Catholic schools have offered excellent programs 
featuring multilingual instruction and preparation aimed at link- 
ing students with foreign universities. The private Catholic schools 
throughout the country, both primary and secondary, have been 
highly regarded for their efforts to instill discipline and character. 

Because it is required by law that each provincial capital have 
a public secondary school, such schools historically have come to 
enjoy special status as surrogate intellectual centers in the absence 
of universities in their regions. The tradition of strong high school 
alumni allegiance is pronounced, with organizations and reunions 
commonplace and attachments to classmates (condisripulos) endur- 
ing. The importance of a high school diploma is further empha- 
sized by each graduating class, which bestows honor on some 
personage or event by naming its graduation after them. High 
school graduates take the selection of the class name as an oppor- 
tunity to make a statement about things that concern them and 
choose one that embodies their thoughts. This custom is followed 
by university graduating classes as well. 

Because people correlate social and economic well-being with 
educational achievement, schooling becomes essential not only for 
its functional usefulness but also for social reasons. The concept 
of education is infused with high intrinsic value, and educated peo- 
ple by definition are more cultivated (culto), worthy, and qualified 
to be admired as role models than others. Educated persons are 



130 



The Society and Its Environment 



thought to have the duty to speak out and address public issues 
on behalf of others less privileged; many students have accepted 
this responsibility as part of their student role. 

The development of national identity is another area to which 
public education is firmly committed. In the wake of the devastat- 
ing War of the Pacific — in which Peru lost territory, wealth, dig- 
nity, and pride — the emergent public school system became the 
major vehicle by which citizens established strong linkages to the 
state. Primary and secondary school curricula are thus heavily laden 
with patriotic, if not jingoistic, nationalism, elements of which are 
written into the nation's textbooks by the Ministry of Education. 
If nothing else, the primary school pupil learns that he or she is 
a Peruvian and that many of Peru's national heroes, such as 
Admiral Miguel Grau, Colonel Francisco Bolognesi, and Leoni- 
cio Prado, were martyrized on the nation's behalf by Chilean forces 
against whom one must be constantly on guard. Ecuador is viewed 
in this same tenor, but perceived as less menacing, constituting 
a vague threat to the nation's security or Amazonic oil rights. 

The school calendar is thus filled with observances and ceremo- 
nies honoring national heroes and martyrs, including Tupac Amaru 
II (Jose Gabriel Condorcanqui). Parades, drum and bugle corps 
(banda de guerra — war band), and flag bearers spend dozens of hours 
in school yards preparing for the celebration of national holidays 
(fiestas patrias), national independence day affairs that are the fea- 
ture of every district, province, and department capital each year 
on July 27 and 28. In Lima the tradition of fiestas patrias involves 
a major display of military forces and equipment accompanied by 
high school units parading the length of Avenida Brasil (Brazil 
Avenue) across Lima. Completing the essentially military focus on 
nationalism in the public schools is the pupil uniform, a military 
cadet-type outfit for boys that includes a cap introduced by the 
General Manuel Odria regime in the 1950s. 

Universities 

As the first university founded in the Americas in 1551 , the Na- 
tional Autonomous University of San Marcos (Universidad Na- 
cional Autonoma de San Marcos — UNAM) has had a long and 
varied history of elitism, reform, populism, controversy, respect, 
prestige, and, especially since the mid-1980s, conflict and confu- 
sion born of political divisions and broad social unrest. Although 
it remained the largest university in the nation, it had lost much 
of its former prestige by 1990. In the 1970-90 period, several smaller 
private institutions, such as the Pontifical Catholic University of 
Peru (Pontificia Universidad Catolica del Peru), located in Lima, 



131 



Peru: A Country Study 

have gained more stature. The major public universities are the 
specialized National Agrarian University (Universidad Nacional 
Agraria — UNA) in Lima's La Molina District and the National 
Engineering University (Universidad Nacional de Ingeniena), also 
in the Lima area. The most prestigious medical school is the pri- 
vate Cayetano Heredia in Lima. 

Lima has captured most of the resources of higher education. 
Universities in Lima, which had 42 percent of all students, em- 
ployed 62 percent of all faculty in the late 1980s. Nevertheless, there 
are universities in all but four of the departments. Although many 
of these are newly founded and poorly equipped, the demand for 
access to advanced study has provided them with a growing stream 
of students. The abandoned colonial University of Huamanga 
(Universidad de Huamanga) in Ayacucho is one of these, having 
been reopened in the late 1950s to fill an educational void for stu- 
dents drawn from impoverished and isolated Ayacucho Depart- 
ment. Although initiated on its modern course with high hopes, 
it has suffered from budgetary inadequacies, frustrated plans, and 
disgruntled students impatient for social change. During the late 
1960s, it became the home to embittered revolutionaries, who 
emerged as the leaders of the SL movement. 

The public schools have long been deeply influenced by politi- 
cal factionalism, which has divided the constitutionally established 
governing bodies of universities. Internal politics at San Marcos 
and other universities have involved complex alliance-making 
among administrators, staff, faculty, and the student body, as well 
as partisan political forces that crosscut these sectors with their own 
agendas. Thus, APRA, various communist factions, and other 
groups have played out their strategies, often with negative conse- 
quences or even little direct reference to the mission of education 
as such. APRA, however, did play a role in establishing the Univer- 
sity of the Center (Universidad del Centro) in Huancayo and Fed- 
erico Villareal in Lima, now the second-largest university. The 
present organization of the public universities was originally con- 
ceived as a result of the Latin American-wide university reform 
movement of the 1920s and 1930s which attempted to democra- 
tize the traditional, colonial- style elite traditions. What has evolved, 
however, has led to constant problems of paralytic conflict, stu- 
dent strikes, slogan mongering, and, often, closure of a university 
for one or more semesters at a time. As a result, the private univer- 
sities, such as those tied to the Catholic Church and various seg- 
ments of the upper-middle classes, have emerged as the most stable 
and best staffed institutions during the last twenty-five years. 



132 



The Society and Its Environment 



Out of this milieu, one can begin to understand the political role 
of teachers and their organizations, such as the Trade Union of 
Education Workers of Peru (Sindicato Unico de Trabajadores de 
la Ensefianza del Peru — SUTEP), the national teachers union. Most 
teachers attend teaching colleges before entering the classroom with 
their certificates, and many of these colleges, such as La Cantuta 
outside of Lima, have long been centers for radical politics. With 
teachers earning less than the average beginning police officer, dis- 
content has run high among teachers for many years. Thus, given 
the importance and role of teachers in district schools nationwide, 
it is not surprising that SUTEP has been a strong voice in expressing 
its social and economic discontent or that the SL and MRTA had 
succeeded in recruiting followers from the ranks of SUTEP. 

Health and Well-Being 

In the early 1990s, Peru was hit by a cholera epidemic, which 
highlighted longstanding health care problems. Review of health 
statistics amply illustrates Peru's vulnerability to disease and the 
uneven distribution of resources to combat it. The most and the 
best of the health facilities were concentrated in metropolitan Lima, 
followed by the principal older coastal cities, including Arequipa, 
and the rest of the country. The differences among these regions 
were not trivial. Whereas Lima had a doctor for every 400 per- 
sons on average, and other coastal areas had a ratio of one doctor 
for every 2,000, the highland departments had one doctor for every 
12,000 persons (see table 9, Appendix). The same levels of differ- 
ence applied with respect to hospital beds, nurses, and all the med- 
ical specialties. 

In the early 1990s, over 25 percent of urban residences and over 
90 percent of rural residences lacked basic potable water and sewer- 
age. Thus, the population has been inevitably exposed to a wide 
variety of waterborne diseases. The incidence of disease not sur- 
prisingly reflected the inequities evidenced in the health system: 
the leading causes of death by infectious diseases have varied from 
year to year, but invariably the principal ones have been respira- 
tory infections, gastroenteritis, common colds, malaria, tubercu- 
losis, influenza, measles, chicken pox, and whooping cough. The 
cholera epidemic, which began in 1990 and claimed international 
headlines, ranked well down the list of causes for death behind these 
others, which have been endemic and basically taken for granted. 
In a typical case, during one year in Huaylas District, which had 
a small clinic and often was fortunate enough to have a doctor in 
residence, 40 percent of all deaths registered were children below 
four years of age, who died because of a regional influenza epidemic. 



133 



Peru: A Country Study 



Although Peru's infant mortality rate per 1,000 live births 
dropped from 130 to 80 over a 26-year period (1965-91), the rate 
in 1991 was still over twice the rate of Colombia and four times 
the rate of Chile. The mortality rate for children under 5 was also 
brought down greatly, from 233 per 1,000 in 1960 to 107 per 1,000 
in 1991. Both measures for 1991 still exceeded all the other Latin 
American countries except Bolivia and Haiti. The only direct mea- 
sure of social welfare that deteriorated was nutrition: calorie con- 
sumption per capita fell 5 percent from the average for 1964-66 
to 1984-86. In 1988 calorie consumption was 2,269, as compared 
with 2,328 in 1987. Because calorie consumption levels generally 
parallel income levels, the decrease must have been concentrated 
at the level of the extremely poor (see table 10, Appendix). 

Peru's lack of general well-being was further suggested by the 
nation's high and growing dependence on foreign food since 1975 
through direct imports, which had increased 300 percent, and food 
assistance programs, which showed a tenfold increment. The United 
States has been by far the largest provider of food assistance to Peru 
through its multiple programs administered under the Food for 
Peace (Public Law 480) projects of the United States Agency for 
International Development (AID). During the 1980s, food aid 
amounted to over 50 percent of all United States economic as- 
sistance. The aid was delivered as maternal and child health as- 
sistance and food-for-work programs administered by CARE 
(Cooperative for American Relief), church-related private volun- 
tary organizations, or by direct sale to the Peruvian government 
for urban market resale. 

Peru's totally inadequate social security system, operated by the 
Peruvian Institute of Social Security (Instituto Peruano de 
Seguridad Social — IPSS), did not remain exempt from the Fujimori 
government's privatization policy. As a result of two legislative 
decrees passed in November 1991, Peru's system for providing so- 
cial security retirement and health benefits underwent significant 
modification. The changes were similar to those made by the mili- 
tary government of Chile in the early 1980s, when employees were 
given a choice of either remaining with the existing system or joining 
private systems set up on an individual capitalization basis. The 
Fujimori government decided to adopt the Chilean social security 
model almost completely. The stated objectives were to permit open 
market competition, alleviate the government's financial burden 
by having it shared by the private sector, improve coverage and 
the quality of benefits, and provide wider access to other social sec- 
tors. Private Pension Funds Administrators (Administradoras de 
Fondos de Pensiones — AFPs) were expected to begin operating in 



134 



The Society and Its Environment 

June 1993. A presidential decree in December 1992 ended the 
IPSS's monopoly on pensions. This action provided a boost to 
Peru's small and underdeveloped capital market by allowing the 
AFPs to invest in bonds issued by the government or Central 
Reserve Bank (Banco Central de Reservas — BCR, also known as 
Central Bank) as well as in companies. 

The cholera and other health and social issues in Peru were inter- 
related closely with the country's steadily worsening environmental 
conditions. The high levels of pollution in large sectors of Lima, 
Chimbote, and other coastal centers had resulted from uncontrolled 
dumping of industrial, automotive, and domestic wastes that had 
created a gaseous atmosphere. The loss of irrigated coastal farm- 
land to urban sprawl, erosion of highland farms, and the clear- 
cutting of Amazonian forest all have conspired to impoverish the 
nation's most valuable natural resources and further exacerbate 
social dilemmas. Although Peru is endowed with perhaps the widest 
range of resources in South America, somehow they have never 
been coherently or effectively utilized to construct a balanced and 
progressive society. The irony of Peru's condition was captured 
long ago in the characterization of the nation as being a "pauper 
sitting on a throne of gold." How to put the gold in the pauper's 
pockets without destroying the chair on which to sit is a puzzle that 
Peruvians and their international supporters have yet to solve. 

* * * 

The literature on Peru is extensive. Particularly important have 
been the many monographs, books, and series issued under the 
aegis of research institutes, such as the Institute of Peruvian Studies 
(Instituto de Estudios Peruanos — IEP) and the Center for Develop- 
ment Studies and Promotion (Centro de Estudios y Promocion del 
Desarrollo — DESCO), and publishers such as Mosca Azul and the 
Pontificia Universidad Catolica del Peru, to name but a few. Read- 
ers can find a lucid review of Incan and pre-Incan societies in 
Michael E. Moseley's The Incas and Their Ancestors. Henry F. Dobyns 
and Paul L. Doughty give an overview of national society in Peru: 
A Cultural History. Women's roles are thoroughly explored in B. 
Ximena Bunster and Elsa Chaney's study of market women, Sellers 
and Servants, and in Susan C. Bourque and Kay B. Warren's Women 
of the Andes. Stephen B. Brush's description of peasant life, Moun- 
tain, Field, and Family, gives a clear explanation of Andean farm- 
ing. There are many excellent studies of the central highlands and 
Mantaro Valley, including Norman Long and Bryan R. Roberts's 
edited volume, Miners, Peasants, and Entrepreneurs. Susan Lobo 



135 



Peru: A Country Study 

discusses the social organization of Lima's squatter settlements in 
her monograph, A House of My Own. Peter Lloyd's comparative 
study of Lima's squatter settlements, The "Young Towns" of Lima, 
gives a strong overview of the results of migration. Teofilo Al- 
tamirano's studies of migration are especially good in showing the 
impacts of change, as is David Collier's Squatters and Oligarchs for 
dealing with the politics of settlement. 

By far the most important analysis of demography and policy 
is Alberto Varillas Montenegro and Patricia Mostajo de Muente's 
La situacion poblacional peruana. Successful early grassroots develop- 
ment work is described in Henry F. Dobyns, Paul L. Doughty, 
and Harold D. Lasswell's account of the Cornell Peru Project at 
Vicos in Peasants, Power, and Applied Social Change. The religious ex- 
periences of Peruvians are reviewed in Jeffrey L. Klaiber's Religion 
and Revolution in Peru, 1824-1976; and Manuel Marzal's Los cami- 
nos religiosos de los inmigrantes en la gran Lima, an excellent account 
of neighborhood-level Catholicism and Protestantism. The litera- 
ture on Peasant Communities is large, but note should be made 
of Cynthia McClintock's Peasant Cooperatives and Political Change in 
Peru, which recounts the changes during the Velasco era. The spe- 
cial problems of coca and cocaine are well presented in Deborah 
Pacini and Christine Franquemont's Coca and Cocaine and in 
Edmundo Morales 's Cocaine: White Gold Rush in Peru. (For further 
information and complete citations, see Bibliography.) 



136 



Chapter 3. The Economy 




Figure on an Incan wool and cotton tapestry 



THE PERUVIAN ECONOMY achieved a higher rate of eco- 
nomic growth than the average for Latin America from 1950 to 
1965, but since then has turned from one of the more dynamic 
to one of the most deeply troubled economies in the region. Even 
in the period of rapid growth, Peru was characterized by excep- 
tionally high degrees of poverty and inequality, and since the late 
1980s poverty has become much worse. Major changes in economic 
strategy introduced in 1990 and 1991 offer new hope for future 
growth but have not been oriented toward reduction of poverty 
and inequality. 

In the first post- World War II decades, Peru achieved an above- 
average rate of growth with low levels of inflation and with rising 
exports of its diversified primary products. Output per capita grew 
2.9 percent a year in the decade of the 1950s and then 3.2 percent 
annually in the first half of the 1960s, compared with the regional 
growth rate of 2.0 percent for these fifteen years. As of 1960, in- 
come per capita was 1 7 percent above the median for Latin Ameri- 
can countries. However, since the mid-1960s the economy has run 
into increasing difficulties. Output per capita failed to grow at all 
from 1965 to 1988, then fell below its 1965 level in 1989 and 1990. 
The previously moderate rate of inflation accelerated, balance-of- 
payments deficits became a chronic problem, and the country ac- 
cumulated a deep external debt. As poverty worsened, political vio- 
lence in the countryside and cities grew increasingly intense. The 
economy and the society as a whole seemed to lose coherence and 
any sense of direction. 

The reasons for this deterioration from 1965 to 1991 are com- 
plex and very much open to debate. Many aspects of the debate 
center on two opposing conceptions of what national economic 
strategy and goals should be. One conviction is that the best course 
is to keep the economic system open to foreign trade and invest- 
ment, to avoid extensive government intervention in the economy, 
and to rely mainly on private enterprise for basic decisions on 
production and investment. The contrary conception favors re- 
stricting foreign trade and investment while promoting an active 
government role in the economy to accelerate industrialization, to 
reduce inequality, and to control the actions of private investors. 
The conflict between these economic models is familiar in the ex- 
perience of all Latin American countries. The failure to reconcile 



139 



Peru: A Country Study 

them in Peru has been an important factor in the deteriorating eco- 
nomic performance since the mid-1960s. 

At least five interacting problems have been important in the 
explanation of why the economy has deteriorated so badly since 
the mid-1960s. First, natural resource limits began to handicap fur- 
ther expansion of primary-product exports, requiring difficult 
changes in the structures of production and trade. Second, partly 
in response to these constraints, and partly as a matter of a grow- 
ing conviction that the country needed to industrialize more rapidly, 
successive governments began to promote industrialization through 
protection against imports, reversing the country's traditional policy 
of relatively open trade. Third, dissatisfaction with widespread in- 
equality and poverty encouraged attempts at radical social change, 
but the two governments that tried to lead the way — those of Gen- 
eral Juan Velasco Alvarado (1968-75) and Alan Garcia Perez (1985- 
90) — failed to find any effective answers or to maintain viable 
macroeconomic policies. Fourth, the temporary move back toward 
a more open economy under the second government of Fernando 
Belaunde Terry (1980-85) resulted in a surge of imports and an 
external crisis — mainly because of currency overvaluation and an 
excessively rapid rise in government spending — that again discred- 
ited this approach. And finally, rural violence took on a profoundly 
destructive character with the growth of the Shining Path (Sendero 
Luminoso — SL) and the cocaine industry. On top of those two 
sources of violence, weakening governmental capability to main- 
tain order and worsening conditions of employment led to grow- 
ing security problems in cities. 

Deteriorating conditions since the mid-1960s need to be consid- 
ered against the background of a deeply divided society and a con- 
siderable lag, compared with many other Latin American countries, 
in developing either a competitive industrial sector or a modern 
structure of public administration able to implement public poli- 
cies effectively. These handicaps can be overstated. After all, the 
Peruvian economy functioned well up to the mid-1960s, and both 
private business and government officials have gained experience 
since then. As of the beginning of the 1990s, however, the coun- 
try's prolonged decline had seriously undermined public confidence 
in the possibilities for recuperation and renewed growth. 

The most evident symptoms of the crisis at the beginning of the 
1990s were falling national output and income, high levels of un- 
employment and underemployment, worsening poverty and vio- 
lence, accelerating inflation, and deep external debt. Under the 
Belaunde administration, the external debt grew too high for Peru 
to meet scheduled service payments, although the government 



140 



The Economy 



maintained the position that payments would be resumed when 
possible. Under the next government, Garcia made a point of 
declaring that payments would be unilaterally limited to 10 per- 
cent of export earnings. His more aggressive position led to a near- 
total cutoff of external credit, which remained in effect through- 
out his term. 

The government of Alberto K. Fujimori (1990- ) adopted a dras- 
tic stabilization program to break out of this complex of problems 
by first attacking the forces driving inflation. The initial shock of 
the new measures, which more than doubled the consumer price 
level in a single day, nearly paralyzed markets and production. 
After a steep fall in output, the economy began to stabilize with 
a lower rate of inflation but without any strong signs of recovery. 
Although the Fujimori program included many lines of intended 
action beyond the initial shock, it remained incomplete in many 
respects. It raised a host of questions about what other policies would 
reactivate the economy while preventing any further burst of in- 
flation, and how long it would take to restore something like Peru's 
earlier capacity for growth. 

Growth and Structural Change 
Historical Background 

Through the nineteenth century and into the mid-twentieth cen- 
tury, the great majority of the Peruvian population depended on 
agriculture and lived in the countryside. By 1876 Lima was the 
only Peruvian city with over 100,000 people — only 4 percent of 
the population (see table 3, Appendix). Much of the impetus for 
economic growth came from primary exports (see Glossary). In 
common with the rest of Latin America up to the 1930s, Peru main- 
tained an open economic system with little government interven- 
tion and few restrictions on either imports or foreign investment. 
Such investment became highly important in the twentieth cen- 
tury, especially in the extraction of raw materials for export. 

For many Latin American countries, the impact of falling ex- 
port prices and curtailed external credit in the Great Depression 
of the 1930s led to fundamental changes in economic policies. Many 
governments began to raise protection against imports in order to 
stimulate domestic industry and to take more active roles in shap- 
ing economic change. But Peru held back from this common move 
and kept on with a relatively open economy. That put it behind 
many other countries in post- World War II industrialization and 
led to increasing pressures for change. Significant protection started 
in the 1960s, accompanied by both new restrictions on foreign 
investment and a more active role of government in the economy. 



141 



Peru: A Country Study 

One of the country's basic problems has been that the growth 
of population in the twentieth century outran the capability to use 
labor productively. The ratio of arable land to population — much 
lower than the average for Latin America — continued decreasing 
through the 1970s. Employment in the modern manufacturing sec- 
tor did not grow fast enough to keep up with the growth of the 
labor force, let alone provide enough opportunities for people mov- 
ing out of rural poverty to seek urban employment. The manufac- 
turing sector's employment as a share of the labor force fell from 
13 percent in 1950 to 10 percent in 1990. 

Orientation Toward Primary-Product Exports 

Peru's most famous exports have been gold, silver, and guano. 
Its gold was taken out on a large scale by the Spanish for many 
years following the conquest and is of little significance now, but 
silver remains an important export. Guano served as Europe's most 
important fertilizer in the mid-nineteenth century and made Peru 
for a time the largest Latin American exporter to Europe. The 
guano boom ran out about 1870, after generating a long period 
of exceptional economic growth (see The Guano Era, 1845-70, 
ch. 1). When the guano boom ended, the economy retreated tem- 
porarily but then recovered with two new directions for expansion. 
One was a new set of primary-product exports and the other a turn 
toward more industrial production for the domestic market. 

The alternative primary exports that initially replaced guano in- 
cluded silver, cotton, rubber, sugar, and lead. As of 1890, silver 
provided 33 percent of all export earnings, sugar 28 percent, and 
cotton, rubber, and wool collectively 37 percent. Copper became 
important at the beginning of the twentieth century, followed on 
a smaller scale by petroleum after 1915. Then, in the post-World 
War II period, fish meal from anchovies caught off the Peruvian 
coast became yet another highly valuable primary-product export. 
Industrial products remained notably absent from Peru's list of ex- 
ports until the 1970s. As late as 1960, manufactured goods were 
only 1 percent of total exports. 

Manufacturing for the home market has had many ups and 
downs. The first major downturn came with the guano boom of 
the mid-nineteenth century. Foreign-exchange earnings from guano 
exports became so abundant and, therefore, imported goods so 
cheap that much of Peru's small-scale local industry went out of 
production. The end of the guano boom relieved this pressure, and 
in the 1890s a new factor, a prolonged depreciation of the currency, 
came into play to stimulate manufacturing. The currency was at 
that time based on silver, and falling world market prices for silver 



142 



The Economy 



in this period acted to raise both import prices and export values 
(of products other than silver), relative to Peruvian costs of produc- 
tion. Without any overt change in national policies, Peru began 
a process of import- substitution industrialization (see Glossary) com- 
bined with stronger incentives for exports. Domestic entrepreneurs 
responded successfully, and the economy began to show promis- 
ing signs of more diversified and autonomous growth. 

This redirection of Peruvian development was in turn sidetracked 
in the 1900-1930 period, in part by a decision to abandon the silver- 
based currency and adopt the gold standard instead. The change 
was intended to make the currency more stable and, in particular, 
to remove the inflationary effect of depreciation. The change suc- 
ceeded in making the currency more stable and to some degree 
in holding down inflation, but Peruvian costs and prices nevertheless 
rose gradually relative to external prices. That trend hurt exports 
and the trade balance, especially in the 1920s, but instead of devalu- 
ing the currency to correct the country's weakening competitive 
position, the government chose to borrow abroad to keep up its 
value. 

As has been noted, many Latin American countries reacted to 
the Great Depression by imposing extensive import restrictions and 
by adopting more activist government policies to promote indus- 
trialization. But at that point, Peru departed from the common 
pattern by rejecting the trend toward protection and intervention. 
After a brief experience with populist-style controls from 1945 to 
1948, Peru returned to the open-economy model and a basically 
conservative style of internal economic management, in sharp con- 
trast to the growing emphasis on import substitution and govern- 
ment control in Argentina, Brazil, Chile, and Colombia. 

Aided by the early recovery of some of its main exports in the 
1930s, and then by development of new primary exports in the 
early post-World War II period, Peru had in many respects the 
most successful economy in Latin America up to the mid-1960s. 
But increasing pressure on the land from a rapidly growing popu- 
lation, accompanied by rising costs and limited supplies of some 
of the country's natural resources, began to intensify demands for 
change. One of the worst blows for continued reliance on growth 
of primary exports was a sudden drop in the fish catch that provided 
supplies for Peru's important fish meal exports; over-fishing plus 
adverse changes in the ocean currents off Peru cut supplies drasti- 
cally in the early 1970s (see Structures of Production, this ch.). 
That reversal coincided with supply problems in copper mining. 
Costs had begun to rise steeply in the older mines, and develop- 
ment of new projects required such large-scale investment that the 



143 



Peru: A Country Study 



foreign companies dominant in copper hesitated to go ahead with 
them. Further, population pressure and increasing difficulties in 
raising output of food converted Peru into an importer for a rising 
share of its food supply and began to work against use of land for 
agricultural exports. Although new investment and better agricul- 
tural techniques could presumably have helped a great deal, it began 
to seem likely that the only way to maintain high rates of growth 
would be to shift the structure of the economy more toward the 
industrial sector. 

Evolution of Foreign Investment 

During its long period of attachment to an open economic sys- 
tem, Peru welcomed foreign investment and in some periods 
adopted tax laws specifically designed to encourage it. That is to 
say, until the 1960s the small fraction of Peruvians in a position 
to determine the country's economic policies welcomed foreign in- 
vestment without paying much attention to growing signs of popular 
opposition. In the 1960s, many things changed. The major change 
for foreign investors was that growing criticism of their role in the 
economy led to nationalization of several of the largest firms and 
to much more restrictive legislation. 

Foreign investment played a relatively minor role in the nine- 
teenth century, although it included railroads, British interests in 
banking and oil, and United States participation in sugar produc- 
tion and exports. Its role grew rapidly in the twentieth century, con- 
centrated especially in export fields. In 1901 , just as Peruvian copper 
began to gain importance, United States firms entered and began 
buying up all but the smallest of the country's copper mines. The 
International Petroleum Company (IPC), a Canadian subsidiary 
of Standard Oil of New Jersey, established domination of oil produc- 
tion by 1914 through purchase of the restricted rights needed to work 
the main oil fields. The trend to foreign entry in manufacturing as 
well as finance and mining was stimulated by promotional legis- 
lation under the eleven-year government of Au gusto B. Legufa y 
Salcedo (1908-12, 1919-30), an initially elected president turned 
dictator who regarded foreign investment as the key to moderni- 
zation of Peru. That much-publicized partnership between a repres- 
sive government and foreign investors was to play an important 
role for the future of Peru, by feeding convictions that foreign in- 
vestment was inescapably linked to control of the country by the 
few at the expense of the public. 

By the end of the 1920s, foreign firms accounted for over 60 per- 
cent of Peru's exports. The Great Depression of the 1930s changed 
that by bringing new foreign investment to a halt and by driving 



144 



The Economy 



down the prices of the products of foreign firms (chiefly copper) 
much further than those exported by Peruvian firms. That double 
effect brought the share of exports by foreign firms down to about 
30 percent by the end of the 1940s. Foreign investment remained 
low in the first postwar years, both because investors in the indus- 
trialized countries were preoccupied at home and because it was 
not encouraged by the populist government in Peru from 1945 to 
1948. After a military coup installed a conservative dictator in 1948, 
the government offered a renewed welcome to foreign investors, 
made particularly effective by the Mining Code of 1950. This law 
offered very favorable tax provisions and quickly led to an upsurge 
of new investment. History repeated itself: as in the 1920s, a repres- 
sive government turned to foreign investors for economic growth 
and for its own support, adding fuel to widespread public distrust 
of foreign firms. 

Public opposition to foreign ownership focused particularly on 
the largest firms owning and exporting natural resources, above 
all in copper and petroleum. The IPC became the center of in- 
creasing conflict over the terms of its operating rights and its fi- 
nancial support of conservative governments. When Belaunde 
(1963-68, 1980-85) took office as president in 1963, he promised 
to reopen negotiations over the contract with IPC, but he then 
delayed the question for years and finally backed away from this 
promise in 1968. His failure to act provoked the military coup led 
by General Velasco, this time from the left wing. The Velasco 
government promptly nationalized IPC and started a determined 
campaign to restrict foreign investment. Although the government 
subsequently moderated its hostility to foreign firms, continuing 
disputes and then the deterioration of the economy led some com- 
panies to withdraw and held foreign investment down to very low 
levels through the 1980s. 

The redirection of economic strategy under the Fujimori govern- 
ment in 1990-91 included a return to welcoming conditions for 
foreign investment, providing a much more favorable legal con- 
text, and disavowing completely the control-oriented policies of the 
governments of Velasco and Garcia. Several foreign oil compa- 
nies responded immediately, although the disorganized state of the 
economy and the context of political violence discouraged any gen- 
eral inflow of new foreign investment. 

Structures of Production 

By official measures of their contributions to the gross domestic 
product (GDP — see Glossary) at current prices, agriculture and 
fishing accounted for 22 percent of total output in the 1950s but 



145 



Peru: A Country Study 



FY 1990 - GDP US$19.3 BILLION 



SERVICES 
(INCLUDING COMMERCE, 
PERSONAL.TRANSPORTATION 
AND COMMUNICATIONS, 
BANKING AND FINANCIAL, 
AND UTILITIES) 
37% 



AGRICULTURE 
AND 
LIVESTOCK 
13% 



GOVERNMENT 

9% 




FISHERIES 
1% 



MANUFACTURING 
INDUSTRIES 

22% 



CONSTRUCTION 

7% 



Source: Based on information from Banco Central de Reservas, Memoria, 1990, Lima, 
1991. 

Figure 8. Gross Domestic Product (GDP) by Sector, 1990 

only 14 percent by 1990. Manufacturing fell slightly from 23 per- 
cent in the 1950s to 22 percent in 1990. The share of mining in- 
creased from 6 percent in the 1950s to 1 1 percent in 1990. Services, 
construction, and government combined rose from 52 percent in 
the 1950s to 53 percent by 1990 (see fig. 8). 

All such measures are subject to uncertainty in all countries, but 
especially so in Peru. One reason is that Peru's national accounts 
have excluded illegal production of coca and its derivatives. Un- 
official estimates suggest that their value in 1989 would have added 
4 percent to GDP for the year and 1 1 percent to the official value 
of agricultural production. A second reason for doubt is that Peru 
has an exceptionally large informal sector (see Glossary) of unregu- 
lated activities, producing many services and some manufacturing 
outside of any official framework of reporting. Although the govern- 
ment includes estimates of such production in the national accounts 



146 



The Economy 



and there is no systematic evidence that it has been either over- 
or underestimated, no one can be sure. 

Agriculture 

Perhaps the most important fact about the agricultural sector 
is that its production has not kept up with the growth of popula- 
tion. Total output of agriculture and fishing combined rose 63 per- 
cent between 1965 and 1988, but output per capita fell by 11 
percent. Output per capita started falling in the early 1950s, climbed 
back up again to its 1950 level by 1970, then began a more 
pronounced and prolonged fall through the 1980s. Per capita out- 
put of food, as distinct from total agriculture, did better: it increased 
1 percent during the period from the early 1980s to the late 1980s. 

The downward trend in agricultural production per capita was 
accompanied by a fall in the share of output going to exports. From 
1948 to 1952, Peru exported 23 percent of its agricultural output; 
by 1976 the export share was down to 8 percent. The trade balance 
for the agricultural sector remained consistently positive through 
the 1970s but then turned into an import surplus for the 1980s (see 
table 11, Appendix). 

Although agricultural production in the aggregate failed to keep 
up with population growth, a few important products stood out 
as exceptions. With favorable support prices, output of rice in- 
creased at an annual rate of 7.9 percent in the 1980s. Changes in 
production techniques helped raise output of chickens and eggs at 
a rate of 6.5 percent in this period. The Ministry of Agriculture 
interpreted these positive results as evidence of what could be ac- 
complished more generally with better incentives and improvement 
of agricultural techniques. For many crops, extremely wide varia- 
tions in output per hectare, even in similar conditions of land and 
water supply, suggest that if effective extension services were im- 
plemented average productivity could be raised to levels closer to 
those achieved by leading producers (see People, Property, and 
Farming Systems, ch. 2). Contrary to the experience of many other 
countries in the region, productivity for most crops other than rice 
showed little or no improvement from 1979 to 1989. 

Obstacles to increasing agricultural production include the poor 
quality of much of the country's land and the high degree of de- 
pendence on erratic supplies of water, plus the negative effects of 
public policies toward agriculture. Frequent recourse to price con- 
trols on food and in some periods to subsidized imports of food 
have hurt agricultural incentives as a byproduct of efforts to hold 
down prices for urban consumers. In general, government policies 



147 



Peru: A Country Study 

have persistently favored urban consumers at the expense of rural 
producers. 

Another important set of questions bearing on agricultural 
productivity concerns the effects of the Agrarian Reform Law of 
1969. The reform itself came long after the beginning of the decline 
in output per capita and was at first accompanied by a brief up- 
turn. But the downtrend set in again from 1972 on and continued 
through the 1980s. The major question about the effects of the re- 
form on productivity concerns the fact that most of the large es- 
tates taken away from prior owners were turned into cooperatives, 
made up of the former permanent workers on the estates. One 
problem was that the workers lacked management experience and 
a second was that incentives for individual participants were often 
unclear. Shares in earnings of the cooperative as a whole were not 
closely related to the individual member's time and effort, with 
the result that many of them concentrated on small parcels allo- 
cated to production for their own families rather than production 
for the cooperative. The performances of the cooperatives turned 
out to be highly varied. Some, particularly those with relatively 
good land and markets, were able to raise output and group earn- 
ings more successfully than the previous landowners. But many 
were not, and by the end of the 1970s many of the cooperatives 
were either bankrupt or close to becoming so. The tension between 
individual incentives and concern for the functions of the cooper- 
ative as a whole led to a general turn toward "decollectivization" 
at the end of the 1970s, breaking up the cooperatives into individual 
holdings. When the practice was made legal by the Belaunde 
government in 1980, it spread rapidly. 

The decollectivization has given Peruvian agriculture a much 
stronger component of individual family farming than it has ever 
had before. The large haciendas are gone, and the new farms are 
closer to a viable family- supporting size than has been true of the 
mintfundios (see Glossary) of the Sierra. The consequences for agricul- 
tural productivity and growth were still unclear in 1 99 1 : incentives 
for individual effort were greater but the smaller production units 
may have lost some economies of scale (see Glossary). An econo- 
metric study of land productivity in north-coast agriculture, trac- 
ing output from prior cooperatives through individual results with 
the same land in the 1980s, brings out a wide variety of results rather 
than any great change in total. It shows that the individual hold- 
ings have on average done slightiy better than the preceding cooper- 
atives on the same land, chiefly by greater inputs of labor per hectare, 
but not enough better to make any convincing case of superiority. 
The authors of this study rightiy emphasize that results in the 1980s 



148 



The Economy 



cannot be explained adequately only in terms of farming practices 
because productivity was also adversely affected by the deteriora- 
tion of the economic system as a whole. 

In addition to the negative effects on agriculture of economy- 
wide disequilibrium in the 1980s, some areas were badly hurt in 
this period by increased violence and partial depopulation. The 
violence worsened from 1988 through 1990, driving people out of 
farms and whole villages and leaving productive land and equip- 
ment idle. In some of the worst-hit areas, production had fallen 
in half. 

Fishing 

Peru's rich fishery has been utilized since ancient times, but it 
was not until the post- World War II decades that an extensive ex- 
port industry developed. Peru's fishing industry rapidly expanded 
in the 1950s to make the country the world's foremost producer 
and exporter of fish meal. Although a large variety of fish are caught 
offshore, the rapid growth was primarily in the catching of ancho- 
vies for processing into fish meal. The fish meal boom provided 
a major stimulus to the economy and accounted for more than a 
quarter of exports in the mid-1960s. 

In the 1960s, however, there were indications that the nation's 
offshore fishing area was being overfished. Experts estimated that 
the fish catch should be about 8 to 9 million tons a year if overfish- 
ing was to be avoided. In 1965 the government attempted to limit 
the annual fish catch to 7 million tons but without success, partly 
because investments in ships and processing facilities greatly ex- 
ceeded that level. By the late 1960s, a finite resource was being 
depleted. In 1970 the anchovy catch peaked at over 12 million tons. 

Peru's rich fishing grounds are largely the result of the cold off- 
shore Humboldt Current (Peruvian Current) that causes a well- 
ing up of marine and plant life on which the fish feed (see Natural 
Systems and Human Life, ch. 2). Periodically, El Nino (The Christ- 
child), a warm- water current from the north, pushes farther south 
than normal and disrupts the flow of the Humboldt Current, de- 
stroying the feed for fish. In such years, the fish catch drops dra- 
matically. The intrusion of El Nino occurred in 1965, 1972, and 
1982-83, for example. The 1972 catch, a quarter its peak size, con- 
tributed to a crisis in the fish meal industry and the disappearance 
of fish meal as a leading Peruvian export during most of the 1970s. 

In 1973 the government nationalized fish processing and mar- 
keting. However, the fish industry became a large drain on the 
government budget as the national fish company paid off former 
owners for their nationalized assets, reduced excess capacity, and 



149 



Peru: A Country Study 



processed a meager catch of less than 4 million tons. Partly to reduce 
the drain on revenue, in 1976 the government sold the fishing fleet 
back to private enterprise. Emphasis was also shifted away from 
fish meal, mainly from anchovies, to edible fish and exports of 
canned and frozen fish products. 

The fishing industry recovered in the late 1970s, but the return 
of El Nino in 1982-83 devastated the industry until the mid-1980s. 
By 1986 the total fish catch exceeded 5.5 million tons and by 1988, 
5.9 million tons, with exports of fish meal valued at US$379 mil- 
lion. The 1989 catch totaled 10 million tons, an increase of 34 per- 
cent over 1988, and fish meal exports were worth US$410 million. 
In late 1991, Congress passed a decree that eliminated all restric- 
tions and monopolies on the production and marketing of fish 
products and encouraged investment in the industry. 

Manufacturing 

The industrial sector has had its problems too, especially in the 
1980s. Manufacturing production grew more rapidly than the econ- 
omy as a whole up to that decade. It increased at a compound an- 
nual rate of 3.8 percent between 1965 and 1980. But it grew only 
1.6 percent a year from 1980 to 1988, and then plunged 23 per- 
cent in the ghastly economic conditions of 1989. 

Of dominant importance in the 1980s were food processing, tex- 
tiles, chemicals, and basic metals; food processing alone accounted 
for nearly one-third of total manufacturing output. For the period 
1980-88, when total manufacturing production increased by only 
about 5 percent, food processing rose by nearly 23 percent. Produc- 
tion of basic metals went the other way, falling by almost 22 per- 
cent. Output of metal products and machinery, closely associated 
with capital goods and investment, fell by 7 percent from 1980 to 
1988, and then fell by one-fourth between 1988 and December 1989 
(see table 12, Appendix). 

The weak picture for manufacturing in the 1980s did not result 
from any intrinsic obstacle on the side of productive capacity but 
from the overall weakness of the economy and of domestic mar- 
kets. The sector's ability to increase production under better eco- 
nomic conditions was demonstrated by what happened between 
1985 and 1987, in the successful first half of the Garcia adminis- 
tration when aggregate demand was stimulated but inflation had 
not yet gotten out of control; manufacturing output shot up 34 per- 
cent between these two years. 

The modern manufacturing sector has relied on relatively capital- 
intensive and import-intensive methods of production, failing to 
provide much help for employment. Manufacturing value increased 



150 



The Economy 



from 20 to 22 percent of GDP between 1950 and 1990, but its share 
of total employment fell from 13 to 10 percent (see table 13, Ap- 
pendix). Its dependence on imports of current inputs and capital 
equipment has probably resulted in large measure from the com- 
bination of an overvalued currency with high protection against 
competing imports. Overvaluation holds down the prices of im- 
ported equipment and supplies, making them artificially cheap rela- 
tive to labor and other domestic inputs. Protection adds to the 
problem by allowing those firms that prefer the most modern pos- 
sible equipment, even when it is more expensive than domestic al- 
ternatives, to pass on any extra costs to captive domestic consumers. 
In addition, protection saddled industrial firms themselves with 
high-cost inputs from other domestic firms, raising their costs to 
levels that have made it extremely difficult for even the most effi- 
cient to compete in export markets. 

Growth of manufacturing, as of the whole economy, has been 
held back seriously by the failure so far to achieve any sustained 
growth of industrial exports. The sector acts as a drag on the pos- 
sibilities of overall growth by using a great deal more of the coun- 
try's scarce foreign exchange to import its supplies and equipment 
than it earns by its exports. This issue is key to future growth. 
Directing manufacturing production more toward exports would 
provide a new avenue for growth through sales to world markets 
and would also help relax the foreign-exchange constraints that so 
frequently hold back the whole economy. 

Mining and Energy 

The mining sector, including petroleum, accounted for only 9 
percent of GDP in 1988 but nearly half of the country's export 
earnings. Its share of total exports increased from 45 percent in 
1970 to 48 percent in 1988. Copper alone accounted for 24.4 per- 
cent of total export earnings in 1970 and 22.5 percent in 1988 (see 
fig. 9). 

Mining developed as an export sector, first for precious metals 
and then chiefly for nonferrous metals needed by the industrial- 
ized countries rather than by non-industrialized Peru. Mining has 
always been an enclave, only weakly related to the domestic econ- 
omy for its supplies or for its markets. But it has been a principal 
provider of the foreign exchange and tax revenue needed to keep 
the rest of the economy going. That key role made the dominance 
of foreign ownership, especially in copper and oil, a focus of bitter 
conflict for many years. The sector became the center of intense 
debate over dependency, exploitation, and national policy toward 
foreign investment. 



151 



Peru: A Country Study 

Foreign investment was the main source of mining development 
up to the 1960s, starting from the turn of the century in copper 
and extending to a wide range of metals after the highly favorable 
Mining Code was enacted in 1950. The sector was divided between 
the largest mines, which produced roughly two-thirds of metal out- 
put and were owned by foreign firms, and the small- to medium- 
size mines, which supplied the other one- third of output and were 
under Peruvian ownership. Following the Mining Code of 1950, 
foreign investment flowed into iron ore, lead, zinc, and other min- 
erals, and metals exports grew from 21 percent of total exports in 
1951 to over 40 percent a decade later. 

When the military overthrew the government of Belaunde in 
1968, the immediate issue was a conflict with IPC, the foreign firm 
dominating the oil industry. The Velasco regime quickly nation- 
alized IPC and then in the 1970s also nationalized the largest cop- 
per mining corporation, Cerro de Pasco. It established the Peruvian 
State Mining Enterprise (Empresa Minera del Peru — Mineroperu) 
as the main state firm for development of copper and the Peru- 
vian State Mineral Marketing Company (Mineroperu Comer- 
cial — Minpeco) as the new state mining marketing agency. 

Output of metal products was erratic in the early 1970s but then 
took a big jump with completion of a major new copper-mining 
project, Cuajone, in 1976. By 1980 value added in the sector, at 
constant prices, was 1.5 times as high as in 1970. But then in the 
1980s, value added began to fall, along with practically everything 
else. By 1988 it was 14 percent below the 1980 level. The decrease 
could be explained to some degree by the general disorganization 
of the economy, but more specific problems were caused by in- 
creased guerrilla violence interrupting supplies and deliveries, and 
by prolonged strikes. 

Extraction, refining, and domestic marketing of oil were under 
control of the Petroleum Enterprise of Peru (Petroleos del Peru — 
Petroperu) from 1968 to 1991. Foreign firms have been allowed 
to participate in exploration for new fields, although negotiations 
over their rights often have proved to be difficult. One foreign firm, 
Belco Petroleum Corporation, maintained offshore production until 
1985, when its operations were nationalized after a dispute over 
taxes with the Garcia government. 

Output of oil products increased gready in the course of the 1970s: 
its value at constant prices was 2.7 times as high in 1980 as in 1970. 
But then oil production joined the collective downtrend: it fell 
sharply between 1980 and 1985 (see table 14, Appendix). Again, 
both the general disorganization of the economy and the increase 
in rural violence contributed to the decrease. Additionally controls 



152 



t 
) 
t 



L 
I 



[ 
I 






International boundary 




National capital 


• 


Populated place 




Crude petroleum pipeline 




Mineralized zone 


100 

I ' 


200 Kilometers 





100 200 Miles 



I 

Source: Based on information from Orlanc 
ica, Washington, September 1988, 
geogrdjico del Peru y el mundo, Lima 

Figure 9. Primary Petroleum, Natl 



154 



The Economy 



on prices of oil products held them far below costs of production 
in the second half of the 1980s. That fact put Petroperu deeply into 
deficit and constrained its ability to finance both production and 
exploration. In 1990 petroleum contributed US$263 million to the 
value of the country's exports. The major changes introduced by 
the Fujimori government in 1990-91 included invitations for new 
investment by foreign oil companies, ending the monopoly position 
of Petroperu. Several foreign oil companies immediately entered 
negotiations to begin exploration activities, either independently 
or in collaboration with Petroperu. 

Services 

The formally legalized side of the service sector includes both 
government and private services. Government services, measured 
by payments for inputs in the absence of any recognized standard 
of output, have grown remarkably fast. As evaluated in current 
prices, government services increased from 4 percent of GDP in 
the decade of the 1950s to 9 percent in 1990. 

Among the private service-sector activities, retail and wholesale 
trade has been the most important, accounting for 13.7 percent 
of GDP in 1988. Financial and business services were next most 
important at 8.5 percent of GDP, followed by transport and com- 
munications at 7.4 percent. Electricity and water constituted a small 
share of output in 1988, at 1 .3 percent of GDP, but they increased 
at a very high rate from 1970 to 1988: their output in 1988 was 
3.4 times as high as in 1970. Although these formal service-sector 
activities have, for the most part, shown significant growth even 
during the difficult 1980s, national accounts indicated that the larg- 
est of them — retail and wholesale trade — did not grow at all be- 
tween 1980 and 1988. But that official measure was not readily 
credible, given the country's population growth and especially the 
rapid growth of the urban population. The official measure ap- 
parently reflected the fact that a growing share of trade was being 
carried out by unregistered individuals and firms. 

Official statistics on production and employment are always sub- 
ject to many reservations in Peru, as in all developing countries, 
but especially so for the service sector. Much of what is going on 
among these activities is outside the formal framework of the econ- 
omy and very difficult to measure. In 1990-91 many service ac- 
tivities were legally registered, reported sales and profits for tax 
purposes, and were in all respects within the formal accounting 
system of the economy. But many others were unregistered and 
might not even be known to exist as far as the government's statistics 
were concerned. That is true in any country for some activities, 



155 




Source: Based on information from Orlando D. Martino, Mineral Industries of Latin Amer- 
ica, Washington, September 1988, 110; and Anfbal Cueva Garcia (ed.), Gran alias 
geogrdfico del Peru y el mundo, Lima, 1990, 651, 692. 



Figure 9. Primary Petroleum, Natural Gas, and Minerals Activity, 1990 



154 



Peru: A Country Study 

particularly those that operate against the law. It is also true on 
a massive scale in Peru for people who are just repairing shoes, 
making small items in their homes to sell in the streets, or in general 
trying to survive by activities that are perfectly normal and produc- 
tive but not registered with the government. Peru has a massive 
informal sector, which includes more than half the total urban labor 
force. This sector accounts for a high proportion of personal ser- 
vices and retail sales activities, as well as considerable industrial 
production. 

Exactly when and why these informal- sector activities moved from 
a marginal to a large share of the economy are open questions. 
One strongly argued view, associated particularly with the work 
of Hernando de Soto, author of El otro sendero (The Other Path), is 
that regulatory activities of government proliferated from the 1960s 
onward, imposing intolerable costs on private business activities. 
A slightly different but consistent view is that the rapid growth of 
the informal sector coincided with increased business taxation, be- 
ginning at the end of the 1960s. The two interpretations fit each 
other, but the former lends itself more to a general argument against 
government regulation of business, without paying much atten- 
tion to the fact that the growth of the informal sector means a shrink- 
ing tax base for the society. 

Both of these analyses surely capture much of the causation be- 
hind the growth of the informal sector in Peru, but they may deflect 
attention from two other explanations that could be more impor- 
tant. One of them concerns the generalized deterioration of the 
economy and the consequent weak growth of job opportunities in 
formal- sector employment. With the rapid growth of the labor force, 
and a high rate of migration to the cities, the number of people 
looking for work far outpaced the number of formal job openings. 
The answer for those without regular employment in the formal 
sector has been to create self-employment activities of their own 
or to work for relatives in small-scale operations, often on a basis 
of family sharing rather than regular wage employment. These peo- 
ple do everything from selling coat hangers on sidewalks in the 
center of the city to putting together computers from discarded spare 
parts. In this view, the problem is not so much government regu- 
lation or excess taxation as it is one of macroeconomic failure of 
the economy as a whole. The informal sector may be in part a way 
to avoid regulation, but more fundamentally it is a necessary means 
of survival, a constructive answer on the individual level to lack 
of success at the level of the macroeconomy. 

Still another interpretation that must be considered centers on 
the background of the migrants to the cities. They have been native 



156 



The Economy 



Americans and mestizos (see Glossary) from rural communities in 
which ways of earning a living are bound within traditional fam- 
ily and community relationships. Production is carried out on a 
self-employed or very small-scale basis with a minimum of the kinds 
of accounting, financial, and legal complications of modern soci- 
ety. The new migrants to the cities look for work and guidance 
from former migrants and especially relatives from the same com- 
munities who are carrying on much the same kinds of activities 
as they knew at home. They re-create in Lima the kinds of infor- 
mal activities they have always known. In this view, the informal 
sector is largely a cultural phenomenon, by no means explicable 
in purely economic terms. 

Succeeding governments have gone back and forth in their treat- 
ment of the informal sector, at times trying to crack down on un- 
registered vendors and their sources of supply, and at other times 
trying to provide them with information and technical help. The 
formal business sector might be expected to press for regulation 
of these activities because the legally registered firms must pay the 
higher costs of following regulations and paying taxes: competi- 
tion is not even. But then the formal sector is itself divided. Be- 
cause some of these firms cut their own costs by subcontracting 
activities to the informal sector, to some degree they share in the 
same profit from being outside the law. Everyone recognizes that 
the informal sector is the source of livelihood for a great many people 
without alternative opportunities and that helping to make them 
more productive could yield important gains for them and for Peru . 
The other side of the coin is that those in this sector pay no atten- 
tion to the legal system, to health and safety regulations, or to the 
society's need for a tax base to support necessary public functions. 

Banking 

In 1987 the Garcia government attempted to nationalize Peru's 
banks, financial institutions, and insurance companies. Under the 
legislation, which Congress approved despite a judicial ruling 
against the government's proposals, the government was to hold 
70 percent of shares of nationalized banks, with the remaining 30 
percent offered for sale to the public. The legislation excluded for- 
eign banks operating in Peru from the nationalization program but 
prohibited them from opening any new branches in Peru. This set 
of proposals stimulated widespread public opposition and provoked 
a breakdown of cooperation between business leaders and the 
government. Private investment fell abruptly. Garcia attempted 
to pursue the nationalization despite all the opposition, but adverse 



157 




158 



Morning rush hour on Avenida de los Heroes in Lima's low-income, 

southern district of San Juan de Miraflores 
Courtesy Inter-American Development Bank 



159 



Peru: A Country Study 

judicial rulings slowed implementation and finally killed the 
proposals. 

In early 1991, Peru's financial system included four develop- 
ment banks, twenty- two commercial banks, eight credit firms (finan- 
cieras de credito) , fifteen savings-and-loan mutuals (mutuales), twelve 
municipal savings-and-loans institutions, and the Savings Bank of 
Lima (Caja de Ahorros de Lima). In May 1991 , the Fujimori gov- 
ernment introduced a new package of economic measures designed 
to liberalize the banking system. The government suspended the 
powers of the Central Reserve Bank (Banco Central de Reservas, 
or BCR — hereafter Central Bank) to set interest rates and allowed 
them to float according to market forces. It also stipulated that in 
the future foreign banks would be able to operate in Peru under 
the same conditions as Peruvian banks. In addition, it amended 
the Agrarian Reform Law of 1969 by allowing farmers to put up 
their land as collateral for bank loans. When it went into effect in 
June 1991, the new banking law shook up the state banking sec- 
tor, which employed 20,000 people and included six state-owned 
banks. The new law eliminated specialized banks, credit firms, and 
mortgage-lending mutuals, forcing them to reorganize as commer- 
cial banks. 

Transportation and Communications 

Peru's transportation sector has deteriorated seriously since the 
mid-1970s. In 1990 the national railroad network, managed by the 
National Railway Enterprise (Empresa Nacional de Ferrocarriles — 
Enafer), totaled 1,884 kilometers, including 1,584 kilometers of 
standard gauge and 300 kilometers of narrow gauge track. The 
national railway network consists of two major systems. The Cen- 
tral Railroad, with approximately 512 kilometers open, runs from 
Callao to Lima to La Oroya to Huancayo (see fig. 10). The highest 
railroad in the world, it crosses the central Andes and connects with 
the Cerro de Pasco Railroad and the narrower gauge Huancayo- 
Huancavelica Railroad, which runs to the mercury mines at Hu- 
ancavelica. The second major railway, the Southern Railroad, with 
1,073 kilometers open, runs from Mollendo to Arequipa to Juliaca 
and Puno — crossing the southern Andes and serving as a major 
link with Bolivia — and from Juliaca proceeds in a northwestern 
direction to Cusco (Cuzco). In addition, the Southern Peru Cop- 
per Corporation operates 219 kilometers of track, including five 
tunnels totaling 27 kilometers. The Garcia government had planned 
to electrify the railroad system and extend the Central and Southern 
railroads, but lack of funds delayed implementation of these plans. 



160 



ECUADOR 



if 



4 s 



Jalara 



'Sullana 
Piureft 



Borj, 



Yuri 



Lambay 



".hiclayo 



Pacasmai 



,ajamarca 



Huamachui 



Trujitto* 



Chimbote 



Tocific 
Ocean 



A 



tHuallanc 
Huan 



iPativilc 





International boundary 




National capital 


• 


Populated place 




Pan American Highway 




Road 




Railroad 




International airport 


© 


Principal port 




Secondary port 


100 

I L_ 


200 Kilometers 





100 200 Miles 



Figure 10. Transportation System, 



162 



The Economy 



Passenger train service — often more comfortable and quicker 
than bus service — existed on the following lines: Lima-La Oroya- 
Huancayo, La Oroya-Cerro de Pasco, Huancayo-Huancavelica, 
Arequipa-Juliaca-Puno, Puno-Juliaca-Cusco, and Cusco-Machu 
picchu-Quillabamba. Lima's mass-transit electric train project has 
proceeded slowly. 

A chronic lack of funds for road repair and construction has led 
to deterioration and, in places, disappearance of Peru's land trans- 
port infrastructure. Most of the high Sierra roads were narrow, 
unsurfaced, and subject to frequent landslides. In 1990 Peru's road 
system totaled almost 70,000 kilometers, including about 7,500 
kilometers of paved roads, 13,500 kilometers of gravel, and 49,000 
kilometers of unimproved earth. The most important highways are 
the paved Pan American Highway (2,495 kilometers), which runs 
southward from the Ecuadorian border along the coast to Lima 
and then south to Arequipa and Chile and is relatively well main- 
tained; the Inca Highway (3,193 kilometers), which runs from Piura 
to Puno; the Jungle Border Highway (la carretera marginal de la selva 
or la marginal), which extends 1,688 kilometers from Cajamarca 
to Madre de Dios Department; and the mosdy paved Trans- Andean 
or Central Highway (834 kilometers), which runs from Lima to 
Pucallpa on the Rio Ucayali via La Oroya, Cerro de Pasco, 
Huanuco, and Tingo Maria. 

By the mid-1980s, the Peruvian Army (Ejercito Peruano — EP) 
had built 700 kilometers of a planned 2,000 kilometers of roads 
located mostly in frontier areas. Three of the sixteen road projects 
planned had been completed, and the thirteen other, longer roads 
were scheduled for completion in the 1990s. The Fujimori govern- 
ment expected to complete its ambitious US$300 million road-repair 
program by June 1994, more than a year earlier than it had ex- 
pected. The program included repairs to 1,400 kilometers of the 
Pan American Highway and Central Highway and maintenance 
of 2,000 kilometers of the same roads. 

Most shipping is through Lima's port of Callao. There are also 
seventeen deep-water ports, mainly in northern Peru — including 
Salaverry, Pacasmayo, and Paita — and in the south, including the 
iron ore port of San Juan. River ports are located at Borja, Iquitos, 
Pucallpa, Puerto Maldonado, and Yurimaguas. The government's 
National Ports Enterprise (Empresa Nacional de Puertos — Enapu) 
administers all coastal, river, and lake ports. In 1990 Peru's mer- 
chant marine totaled twenty-nine ships, including sixteen cargo 
ships; one refrigerated cargo ship; one roll-on/roll-off cargo ship; 
three petroleum, oils, and lubricants tankers; and eight bulk cargo 
ships. In addition, eight naval tankers and one naval cargo ship 



163 



Peru: A Country Study 

were sometimes used commercially. Inland waterways totaled 8,600 
kilometers of navigable tributaries of the Amazon system and 208 
kilometers of Lake Titicaca. Although the Fujimori government 
did not plan to privatize Enapu, it invited tenders from private 
operators to run port operations. 

Peru had 27 large transport aircraft and 205 useable airports in 
1990, 36 of which had permanent-surface runways. Of the 205 air- 
ports, there were 2 with runways over 3,659 meters, 24 with run- 
ways 2,440 to 3,659 meters, and 42 with runways 1,220 to 2,439 
meters. The principal international airport is Jorge Chavez In- 
ternational Airport near Lima. Other international airports are 
Colonel Francisco Secada Vigneta Airport, near Iquitos; the new 
Velasco Astete Airport at Quispiquilla, near Cusco; and Rodriguez 
Ballon Airport, near Arequipa. 

The Fujimori government planned to privatize the flag air car- 
rier, the Air Transport Company of Peru (Empresa de Transporte 
Aereo del Peru — Aeroperu). Forty percent of Aeroperu was offered 
in 1991 to a qualified foreign airline, 20 percent to Peruvian in- 
vestors, and 10 percent to the airline's personnel, with the state 
holding on to the remaining 30 percent. Aeroperu, which was in 
a very poor state in 1991 , has operated both internal services and 
international routes to other Latin American countries and the 
United States. Other domestic airlines with routes to Miami were 
Airlines of Peru (Aeronaves del Peru) and the Faucett Aviation 
Company (Compama de Aviacion Faucett). A new domestic airline, 
Aerochasqui, based in Arequipa, operated flights to and from Lima 
and elsewhere in Peru. 

Peru's telecommunications were fairly adequate for most require- 
ments, although its telephone system was one of the least devel- 
oped in Latin America. The country had a nationwide radio relay 
system; 544,000 telephones; 273 AM radio stations; no FM sta- 
tions; 140 television stations; and 144 shortwave stations. Since 
1988 Peru has utilized the Pan American Satellite (PAS-1) and 
two Atlantic Ocean Intelsat (International Telecommunications 
Satellite Organization) earth stations, with twelve domestic anten- 
nas. In the late 1980s, the government granted the Peruvian Tele- 
phone Company (Compama Peruana de Telefonos — CPT), serving 
the Lima-Callao area, permission to offer facsimile, telex, data 
transmission, international long-distance telephone, and cellular 
telephone service. However, in November 1991 the Fujimori gov- 
ernment eliminated the state's telecommunications monopoly, say- 
ing that the CPT and the National Telecommunications Enterprise 
of Peru (Empresa Nacional de Telecomunicaciones del Peru — 
Entelperu), responsible for telecommunications outside the Lima- 
Callao area, had impeded modernization and hurt consumers, 



164 



The Economy 



especially in rural areas. The government also vowed to promote 
free competition in providing telecommunications services. It in- 
creased the capital of the CPT and Entelperu and offered a 40 per- 
cent stake in them to foreign bidders. 

Tourism 

Lima, with its Spanish colonial architecture, and Cusco, with 
its impressive stonework of pre-Inca and Inca civilizations, nota- 
bly at Machupicchu, are the centers of Peru's ailing tourism in- 
dustry. Lake Titicaca also constitutes a major tourist attraction. 
However, as a result of terrorism, insurgency, common crime, the 
1990-91 cholera epidemic, and the April 1992 coup, tourism has 
declined drastically since 1988, when Peru received an estimated 
320,000 foreign visitors and US$300 million in tourism earnings. 
One American tourist was murdered in Cusco in early 1990, and 
several others died in the late 1980s because of sabotage of a train 
line between Cusco and Machupicchu. Under sharply increased 
taxes on tourism imposed in 1989 in response to declining num- 
bers of tourists, foreigners have had to pay far more than Peruvi- 
ans for internal flights and visits to museums and archaeological 
sites. In 1989 six flights a day shuttled tourists between Cusco and 
Lima, but by late 1990 there were only two. Tourist arrivals in 
Peru continued to decline in 1990 and 1991. 

According to the National Tourism Board (Camara Nacional 
de Turismo — Canatur), tourism in the first half of 1992 was down 
30 percent from the first semester of 1991, which, in turn, fell 70 
percent from 1988, tourism's record year. A major blow to Lima's 
hotel business was the SL's car bomb attack in the exclusive 
Miraflores district on July 16, 1992, in which six major hotels suf- 
fered over US$1 million in damages. The number of tourists visit- 
ing Cusco and Machupicchu had dropped 76 percent since 1988. 

Foreign Trade and the Balance of Payments 

Foreign trade has always been a crucial factor in Peruvian eco- 
nomic growth, sometimes as a major stimulus and sometimes more 
as a source of disruptive shocks. Falling external demand can set 
the whole economy back quickly, and at all times import competi- 
tion can constrain the development of domestic industries. Many 
Peruvians believe that the society would be healthier and the econ- 
omy more dynamic if foreign trade were tightly restricted. Many 
others favor taking maximum advantage of the opportunities opened 
up by external trade, even if the structure of production were pulled 
toward export specialization at the cost of greater diversification 
and industrialization. 



165 



Peru: A Country Study 

Export and Import Structures 

Peru's exports and imports have been so volatile, owing both 
to external fluctuations and to internal problems, that it is hard 
to define what could be considered normal structures of trade. Mea- 
sured in terms of dollars, exports rose greatly from 1970 to 1980, 
from US$1.0 billion to US$3.9 billion, but they then fell back to 
US$2.5 billion by 1986. Imports were less than exports in 1970, 
at US$700 million, but tripled in the next five years as a result 
of the heavy spending of the military government in that period. 
Imports were pulled back to US$1 .7 billion by 1978, then jumped 
to US$3.8 billion in 1981 as the Belaunde government both liber- 
alized imports and increased its own spending. At the end of the 
decade, in 1989, the collapse of domestic economic activity pulled 
imports back down to US$2.0 billion, exactly where they had been 
a decade earlier. Because the same collapse of domestic sales en- 
couraged increased attempts to export, Peru finished the decade 
with a record trade surplus of US$1 .6 billion. The surplus was not 
so much an achievement as it was the result of failure to maintain 
economic growth (see table 15, Appendix). 

In a comparison of exports of goods and services to GDP, the 
country's export ratio was 16 percent in 1965 but fell to 10 per- 
cent by 1988. Imports of goods and services were 19 percent of 
GDP in 1965 and 14 percent in 1988, giving the country a net 
resource inflow equal to 3 percent of GDP in the earlier year and 
4 percent in 1988. 

Taking 1988 as something close to a representative year (to avoid 
the particularly strained conditions of 1989 and 1990), exports of 
goods included US$1.4 billion worth of traditional products and 
US$0.8 billion of more diversified nontraditional products. Both 
of these values were, unhappily, below their levels as of 1980 (see 
table 16, Appendix). Metals and petroleum were by far the most 
important products. The principal metal products accounted for 
50.6 percent of total commodity export earnings, with petroleum 
and its derivatives adding 8 percent. Copper stood out, as it has 
for many years, accounting for 22.3 percent of earnings in 1990, 
down slightly from more than 24 percent in 1970. Zinc exports 
climbed rapidly between these twenty years, reaching 12.6 percent 
of the total in 1990. A comparison of 1970 and 1990 somewhat 
misleadingly suggests strong growth for petroleum exports, from 
a negligible level in 1970 to 8 percent of total exports in 1990. This 
suggestion is misleading because oil exports actually reached their 
peak in 1980, at US$792 million and 20 percent of total exports. 
By 1990 their value had fallen, at much lower prices, to US$263 
million. 



166 



Trucks passing a construction area on the northern coast-to-jungle Olmos- 

Corral Quemado road 
Courtesy Inter-American Development Bank 

Agricultural exports were much lower than those from the min- 
ing sector, but the four major products — coffee, cotton, fish meal, 
and sugar — added up to 19 percent of total exports in 1988. They 
did not show much growth between 1970 and 1988, rising only 
from US$462 to US$523 million over this eighteen-year period. 

Peru's future growth prospects depend crucially on the ability 
to develop new exports, preferably manufacturing exports and more 
diversified, higher- value, primary products to supplement the tradi- 
tional products. Manufacturing exports are free of the built-in limits 
of production imposed by dependence on exhaustible natural 
resources, and their markets are usually more stable than those 
for primary products. For Peruvian industrialists who have lim- 
ited their focus mainly to protected domestic markets, manufac- 
tured goods offer both a competitive stimulus and important 
learning opportunities. If more Peruvian manufacturers enter ex- 
port markets successfully, the prospects for growth of productivity 
and of entrepreneurial capacity could greatly improve. 

Peruvian industrial firms seemed to be starting this important 
transition in the 1960-80 period, but then the new trend went into 
reverse. Exports of manufactured goods were US$743 million in 
1980, but by 1987 they had fallen to US$540 million. In 1987 the 



167 



Peru: A Country Study 



manufacturing sector's imports of inputs for production and of cap- 
ital equipment were nearly triple its exports. 

The manufacturing sector's failure so far to raise exports even 
close to the level of its own imports is a crucial problem for Peru. 
The problem could in theory be resolved by changing two aspects 
of national economic policy that have worked powerfully to hold 
back industrial exports. One of the two key obstacles has been the 
high rate of effective protection for industrial products. High pro- 
tection increases the profitability of selling to the home market rather 
than exporting and also makes it difficult to compete abroad be- 
cause it raises the prices of inputs for Peruvian firms above the 
international prices available to competitors in other countries. 
Peruvian protection was greatly raised in the 1960s and then again, 
after temporary reductions, in the second half of the 1980s. As dis- 
cussed below, the Fujimori government went back the other way: 
it simplified the tariff structure and made significant reductions 
for the products with the highest rates of protection. These changes 
should help to release constraints on manufacturing exports, but 
the likely results depend on the other key policy variable concerned, 
the exchange rate. 

The second policy adverse to exports has been chronic over- 
valuation of the currency. With the Peruvian currency overvalued, 
the domestic currency equivalent of foreign-exchange earnings by 
exporters is held down; for most producers, exports become sim- 
ply unprofitable. The currency has clearly been overvalued in the 
great majority of years since 1960, and especially so at the end of 
the 1980s. The degree of overvaluation was relatively low as of 1980, 
but the real exchange rate (see Glossary) fell nearly 50 percent from 
1980 to 1989. Although there is room for a great deal of debate 
about how rapidly exports of manufactures could grow in response 
to a rising real exchange rate, there is no doubt that a falling rate 
can kill them off. 

Imports are also responsive to changes in exchange rates, 
although they are more strongly affected by changes in the levels 
of domestic demand and economic activity, and in some periods 
by changes in degrees of import restriction. Domestic economic 
activity has a particularly direct effect because most imports con- 
sist of current inputs for production and capital equipment. The 
structure of imports in 1988 was fairly representative in this respect. 
Imports of consumer goods were only 10 percent of the total, reflect- 
ing the high import barriers in effect for them. Imports of current 
inputs for production of the private sector were 34 percent of the 
total, and similar imports by the public sector were equal to 23 
percent of the total. Imports of machinery and equipment by the 



168 



The Economy 



private sector were 23 percent and those by the public sector, 2 
percent. 

Imports of consumer goods became temporarily more impor- 
tant when the Belaunde government relaxed restrictions on them 
in the early 1980s. Consumer goods imported by the private sec- 
tor more than tripled between 1979 and 1982, increasing from 5 
percent to 1 1 percent of a rapidly rising import total. But the trade 
deficit went up so swiftly in this period that restrictions were quickly 
restored. The experience led many Peruvians to conclude that the 
country could not afford to allow anything like free access to im- 
ports. An alternative view, apparently shared by the Fujimori 
government, is that the trade deficit resulted more from excess 
spending than from the reduction of restrictions, and that a more 
comprehensive and sustained opening of the economy could do a 
great deal to foster more competitive Peruvian industries. 

Following this brief experiment with more open trade in the early 
1980s, Peru returned to its preceding regime of high tariffs and 
multiple forms of direct import restriction. At the end of the Garcia 
government, in June 1990, the average tariff rate was 66 percent. 
A more significant measure for the industrial sector is the rate 
of effective protection (see Glossary) for its products. As of July 
1990, effective protection for the industrial sector averaged 82 per- 
cent. Individual industries had widely different levels of effective 
protection, ranging up to 130 percent for clothing. And in addi- 
tion to such protection through tariffs, twenty different regulations 
authorized direct restrictions to prohibit or to apply quota limits 
to many products. 

The Fujimori government introduced a revolution in trade policy 
in September 1990 and carried it still further with new changes 
in March 1991 . All direct quantitative restrictions on imports were 
eliminated. The rate of effective protection for industry was cut 
from 83 percent to 44 percent in September and to 24 percent in 
March. The wildly dispersed tariff rates previously in effect were 
consolidated at three much lower levels: 15 percent for inputs into 
production, 20 percent for capital goods, and 25 percent for con- 
sumer goods. 

Policies with respect to protection and exchange rates can make 
a great deal of difference to the evolution of exports and imports, 
and to the economy as a whole, but that is not to deny the indepen- 
dent importance of fluctuations in external demand and prices. A 
worldwide industrial boom invariably works to raise prices of metals 
and to create an export boom for Peru, just as a worldwide con- 
traction acts to set it back. Peru's terms of trade (see Glossary) 
have always been highly volatile. Using 1978 as a base year equal 



169 



Peru: A Country Study 

to 100, the terms of trade index went as high as 150 and as low 
as 86 in the course of the 1970s (the higher the index, the better 
are the terms of trade for a given country). The index reached 153 
in 1980 and then plunged to 66 in 1986, cutting more than half 
the purchasing power of a given volume of exports. The terms of 
trade then began a modest rise, to an index of 77 by 1989. These 
swings in relative prices apply above all to Peru's primary exports, 
especially metals. Their impacts on the Peruvian economy could 
be moderated considerably if the country manages to move toward 
an export structure based more on manufactured goods and less 
on primary exports. 

Economic Implications of Coca 

Production and exports of coca and its derivatives have many 
different effects on the Peruvian economy, all of them difficult to 
quantify because basic information cannot be checked in any de- 
pendable way. On the positive side, coca adds to the incomes of 
otherwise extremely poor peasant producers and also adds foreign 
exchange earnings that, at least in part, flow through to the legal 
economy and help finance imports. On the negative side, coca pulls 
human effort and land into production at the expense of possi- 
ble alternative food production; holds down the price of foreign 
currency and therefore the incentives for legal exports; causes eco- 
logical damage from the chemical residues used to process cocaine; 
increases violence and the costs to the society of trying to restrain 
it; and aggravates corruption in the military, police, and civilian 
government. If coca production were to fall back to traditional levels 
of consumption by Andean peasants themselves, many Peruvians 
would lose income; if it continued at 1990-91 levels or grew, the 
society as a whole would be the poorer in terms of competitive 
strength in legal markets and in terms of civil order. 

Neither Peru's national accounts nor its export data include any 
estimates for the value of coca leaf and its derivatives. A private 
statistical service, Cuanto S.A., estimates that income from coca 
added 7 percent to the officially calculated value of GDP in 1979 
and 4 percent in 1989. Estimated drug exports averaged US$1.4 
billion in the years 1979-82 and US$1 .6 billion in 1986-89. Without 
counting coca, commodity exports in 1989 were US$3.7 billion. 
Counting coca, they were US$5.6 billion. 

Considering the agricultural sector separately, these estimates 
suggest a strong impact, raising value added by about 11 percent 
as of 1989. That extra income goes in unknown proportions to 
dealers and processors (mostly Colombians); to third parties pro- 
viding protection, including the Shining Path; and to peasant 



170 



Market day near Puno 
Courtesy World Bank (Ramon Cerra) 

producers. Even though the share going to peasant producers may 
not be high, their incomes from coca can be more than seven times 
as high per hectare of land than could be earned in the next most 
profitable (legal) crop, coffee. Growers in the main producing 
region, the Upper Huallaga Valley, are estimated to earn about 
US$4,500 per year for each hectare in coca, compared with about 
US$600 in coffee. Such differentials are mainly a matter of the high 
market value of coca, but they also reflect the fact that this partic- 
ular region of Peru is singularly well adapted to growth of coca 
and poorly suited to most alternative crops. Coca would be an ideal 
crop here, with low opportunity costs, if it were not for all its nega- 
tive human and economic implications. 

Government policies to restrain coca production and marketing 
have been more in the realm of police and military action than that 
of economics. One of the most appealing proposals within the range 
of economic policies has been to promote alternative crops through 
credit and technical assistance plus guaranteed purchasing at favora- 
ble prices. The two main drawbacks to developing such a program 
have been the government's own lack of financial resources and 
the enormous differentials between earnings from coca and those 
possible from alternatives. The approach would have much more 
of a chance for success if cocaine demand in the United States could 



171 



Peru: A Country Study 



be reduced significantly, allowing the value of coca to fall. Absent 
such a change on the demand side, economic incentives in Peru 
work powerfully to keep up supply. 

Balance of Payments and External Debt 

Peru's balance of payments has been an almost constant problem 
since the early 1970s, or rather two kinds of problems alternating 
with each other. The most frequent difficulty is that the deficit on 
current account — the deficit for current trade and services — has 
increased too fast to be financed by feasible borrowing abroad. This 
situation is the common meaning of a " foreign-exchange crisis," 
and it has been a recurring problem in Peru. The opposite kind 
of difficulty is that it has been too easy to borrow abroad in some 
periods in which fiscal restraint plus currency devaluation might 
have served both to improve the current account and promote stead- 
ier growth. In certain periods, especially 1972-75 and 1980-83, 
the government has been able to borrow so much abroad that the 
plentiful supply of foreign exchange has reduced pressures to take 
such corrective action. External credit can be so tight that its scar- 
city cripples production or so abundant that it encourages waste 
and discourages desirable policy change. 

Peru's current-account deficits and external borrowing to finance 
them were safely low fractions of GDP for the 1960s as a whole. 
For both 1971 and 1972, the deficits were barely 1 percent of GDP. 
But in the next several years, the rising fiscal deficits of the mili- 
tary government spilled over into generalized excess demand and 
the highest current-account deficits Peru had ever known. The 
deficit in 1975, at over US$1.5 billion, far exceeded the previous 
peak of US$282 million in 1967. It was equal to a record 10 per- 
cent of GDP. Peru's external debt correspondingly rose well be- 
yond any level known before, pointing the way to the rocky road 
ahead. 

The deep deficits on current account in 1974 and 1975 and their 
financing were examples of the second kind of problem mentioned 
earlier. Peru had fallen into rising fiscal deficits and currency over- 
valuation, but pressures to take corrective action were forestalled 
because the government could borrow readily abroad and avoid 
changing its policies. By 1975 the disequilibrium was so great that 
foreign creditors began to back off, creating a foreign-exchange 
crisis that forced the government to take corrective action. Fiscal 
and monetary restraints and devaluation were finally adopted. 
These measures plus good luck with export prices gradually cut 
down the external deficits and achieved a significant surplus on 
current account by 1979. 



172 



The Economy 



The new civilian government of President Belaunde started in 
1 980 with a very small external deficit and promptly turned it into 
a very large one. Rapidly rising spending plus temporary import 
liberalization raised the current-account deficit from US$101 mil- 
lion in 1980 to over US$1 .7 billion in 1981 . Once again, the govern- 
ment's ability to borrow abroad, restored by the austerity of the 
late 1970s, proved to be costly to the country by permitting con- 
tinued excess spending and currency overvaluation. 

The Belaunde administration was forced to adopt more restrained 
spending policies in its later years, slowing the economy but bringing 
the current- account deficit down again. It left the Garcia govern- 
ment with a small surplus by 1985. Then the seemingly inexor- 
able cycle went right back into action: the Garcia government 
plunged into an expansion program that temporarily revived the 
economy but raised demand too fast for external balance. The sur- 
plus of 1985 was replaced by deficits in the range of US$1 billion 
to US$1.5 billion from 1986 through 1988. In 1989 the combina- 
tion of internal disruption and a brief attempt to restrain demand 
brought down production and imports so sharply that the current 
account moved back into surplus. The surplus clearly reflected a 
severe setback to the economy, rather than an achievement based 
on macroeconomic balance and rising exports. 

The external borrowing in these repeated periods of high current- 
account deficits naturally created a high level of external debt. Ex- 
ternal borrowing is normal for a developing country and can help 
increase the rate of economic growth by providing additional 
resources for investment. But the crucial questions concern degrees 
of borrowing and the country's ability to finance debt service out 
of its gains in productive capacity. In the periods described, Peru 
borrowed very heavily and was unable to make much headway in 
its capacity to finance imports plus debt service out of its export 
earnings. That combination led to major arrears in making sched- 
uled debt-service payments. 

Total long-term debt of the public and private sectors combined 
was estimated by the World Bank (see Glossary) at US$2.7 billion 
at the end of 1970 and US$13.9 billion at the end of 1988. At the 
latter level, it was equal to 56 percent of GDP. Peruvian estimates, 
including short-term debt as well, show totals of US$18.1 billion 
for 1988 and US$19.8 billion for 1989. The great increase in long- 
term debt between 1970 and 1988 resulted almost entirely from 
borrowing by the public sector. The public sector's long-term debt 
was equal to 12 percent of GDP in 1970 but 50 percent of GDP 
by 1988. 



173 



Peru: A Country Study 

Actual payments of debt service have not been high proportions 
of exports or of GDP because both the Belaunde government in 
its last years and the Garcia government stopped trying to keep 
up with scheduled payments. Debt service had run at 2 percent 
of GDP and 12 percent of exports in 1970, when payments were 
being made on schedule, but they were only 1 percent of GDP and 
8 percent of exports despite the much larger debt in 1988. Using 
the average rate of interest on Peruvian public debt in 1988 (7.6 
percent), interest payments due would have been US$948 million; 
actual interest payments were US$164 million. 

The Belaunde government let scheduled debt payments slide by 
as quietly as possible. But President Garcia converted the problem 
into a worldwide challenge to the creditor countries. In his inau- 
gural address of July 1985, he declared that his obligations to the 
welfare of Peru came ahead of financial obligations to foreign cre- 
ditors and announced that Peru would not allocate more than 10 
percent of its export earnings to debt service. The International 
Monetary Fund (IMF — see Glossary) and the World Bank con- 
tinued for some time to encourage multilateral negotiations instead 
of this unilateral limit, but when Garcia persisted the IMF declared 
Peru to be ineligible for new credit. 

The Fujimori government emphatically rejected Garcia' s posi- 
tion and requested renewed negotiations with external creditors. 
The government's willingness to negotiate and its accompanying 
programs of economic reform led the international financial agen- 
cies to resume discussions. Although the United States-led Sup- 
port Group (Grupo de Apoyo) of nations failed to come up with 
the US$1 .3 billion that Peru needed to clear its arrears with multi- 
laterals, the IMF nevertheless decided in September 1991 to lend 
Peru the money to clear its arrears and then start new adjustment 
lending. This crucial step toward more normal relationships with 
the international financial and development agencies was once more 
put into question in April 1992, when the Fujimori government 
suspended democracy in Peru and the international agencies 
responded by suspending negotiations on external credit. 

Employment and Wages, Poverty, and Income Distribution 

In the first post- World War II decades, the economy was able 
to absorb the growing urban labor force fairly well, allowing real 
wages to rise and probably achieving some reduction in poverty. 
But from the early 1970s to the early 1990s, change has been down- 
hill in such respects, with falling real wages, increasing poverty, 
and worsening indices of underemployment. 



174 



At a bus stop in downtown Lima 
Courtesy Inter-American Development Bank 

Employment 

The Peruvian labor force increased from 3 . 1 million workers in 
1960 to 5.6 million by 1980, and to 7.6 million by 1990. As it did 
so, the share of the labor force in agriculture steadily decreased, 
but the shares in manufacturing and mining failed to rise (see 
fig. 11). On balance, the decreases in the agricultural share had 
to be offset by increases in the share in service activities, some of 
them offering productive employment at above-poverty income 
levels but many of them not (see table 17, Appendix). 

Peru's long process of transition away from a rural society was 
far from complete at the beginning of the post- World War II pe- 
riod. Fifty-nine percent of the labor force was still working in 
agriculture in 1950. That share fell to barely over half by 1960 and 
to 34 percent by 1990. The more surprising trend is that the share 
of the labor force in manufacturing also fell, from 13 percent in 
1950 to 10 percent by 1990. Stable shares in both construction and 
mining meant that the shift out of agriculture went mainly toward 
services, pulling their share of employment up from 23 percent in 
1950 to 50 percent by 1990. 

The persistent decrease in the share of the labor force in agricul- 
ture could in theory have helped to alleviate rural poverty by leav- 
ing higher average land holdings to those remaining in agriculture. 



175 



Peru: A Country Study 

But the absolute number of people trying to make a living from 
inadequate land holdings actually increased. The labor force in 
agriculture rose 52 percent between 1960 and 1990. In addition, 
emigration from agriculture exerted increasing pressure on labor 
markets in the cities, and the increase in rural workers kept earn- 
ings low in that sector. 

A growing labor force need not drive wages down and in most 
instances does not, provided that investment and technical change 
keep opening up new opportunities for productive employment fast 
enough to absorb the larger number of workers. Peru managed 
to accomplish such growth in the first post-World War II decades, 
but from the early 1970s the trend went downward. As more and 
more workers tried to survive in the service sector by self- 
employment or work with families instead of formally registered 
firms, they created a rapidly growing informal sector. Workers in 
the informal sector are mostly employed, and they certainly add 
to national income, but their earnings are often below the poverty 
line. 

Overt unemployment that can actually be counted has been only 
a small part of the problem. The overt unemployment level in Lima 
was an estimated 7 percent in 1980, rising to 8 percent by 1990. 
But estimates of underemployment in part-time or very low-income 
activities indicate that 26 percent of Lima's labor force was in this 
category in 1980, and fully 86 percent in 1990. Such measures are 
invariably somewhat arbitrary, depending on how underemploy- 
ment is defined and measured. However, the fact that the share 
of Lima's labor force fitting the definition more than tripled be- 
tween 1980 and 1990 is readily understandable in the light of the 
deterioration of the economy in the 1980s. 

Wages 

Real wages in Peru rose when the economy was advancing in 
the 1950s and 1960s but then began to go down persistently. From 
1956 to 1972, average wages in manufacturing increased at an an- 
nual rate of 4.1 percent. But then from 1972 to 1980, they went 
back down at the rate of 3.6 percent a year, and from 1980 to 1989 
they went further down at the rate of 5.2 percent a year. Although 
comparisons of real wage levels over long periods are inherently 
uncertain, given many changes in the structures of wages and prices, 
it seems evident that real wages in Peruvian manufacturing were 
much lower in 1989 than they had been a third of a century earlier. 

Even in comparison with the sharp fall in manufacturing real 
wages during the 1980s, the concurrent plunge in real minimum 
wages for urban workers was appalling. While the average for 



176 



The Economy 



manufacturing fell 58 percent from 1980 to 1989, the real minimum 
wage fell 77 percent; the purchasing power of the minimum wage 
in 1989 was less than one-fourth its level in 1980. 

The minimum wage applies to legally employed workers in the 
formal sector. The much larger number of workers in the infor- 
mal sector, not covered by the minimum wage, also lost purchas- 
ing power in the course of the 1980s but apparently not as 
drastically. An index of real earnings in the informal sector shows 
a decrease of 28 percent between December 1980 and December 
1989. That index also shows extreme volatility. Real earnings rose 
steeply between December 1980 and December 1987, almost dou- 
bling in this period, and then plunged to a level far below the starting 
point. 

Organized Labor 

In labor markets as weak as those of Peru from the early 1970s 
onward, organized labor has not normally had any great bargain- 
ing power. It could affect the political balance, but it has not been 
able to do much to keep real earnings from falling when the 
economy declined. Peruvian labor has never been more than moder- 
ately organized in any case: unionization did not take off signifi- 
cantly until the political climate changed with the reformist military 
government of 1968. Labor has played a more active political role 
since that time, but has not so far been able to prevent deteriora- 
tion of real wages (see Labor Unions, ch. 4). 

Organized labor in Peru got off to a slow start in the interwar 
period (1919-40), compared with active unionism in Argentina, 
Chile, and Venezuela. Still, the textile workers, in the one sizable 
industry of the time, managed to defy the government and win 
a famous strike in 1919. They gave the credit to a student activist 
who stepped in to lead them and negotiated an impressive victory. 
The activist, Victor Raul Haya de la Torre, went on at the begin- 
ning of the 1930s to found the American Popular Revolutionary 
Alliance (Alianza Popular Revolucionaria Americana — APRA), 
the country's first mass-based political party. Haya de la Torre 
simultaneously promoted organization of labor through the Con- 
federation of Peruvian Workers (Confederacion de Trabajadores 
del Peru — CTP) and consolidated a close partnership between 
APRA and the CTP. The CTP was the dominant voice of labor 
until Haya de la Torre allied himself with the conservative side 
of the political spectrum during the 1960s. That move to the right 
then stimulated the growth of a rival Communist-led labor feder- 
ation, the General Confederation of Peruvian Workers (Confede- 
racion General de Trabajadores del Peru — CGTP). 



177 



Peru: A Country Study 







^1 IN w 1— VJ L/ 1 1 'I VJ 1 VI IVI LRW L. j 




PERSONAL, 




TRANSPORTATION AND 




COMMUNICATIONS, 




BANKING AND FINANCIAL, ^ 




AND UTILITIES) 




50% / 






\XV\XX>\ AGRICULTURE & 




WvoOOoA FISHERIES 

v X X X X X X X XA 1 Iwl IUI llb-w 




\ \ \ \ \ \ \ \ >* 








=m j/ MANUFACTURING 




INDUSTRIES 




\ 10% 




MINING 


CONSTRUCTION 


2% 


4% 



Source: Based on information from Richard Webb and Graciela Fernandez Baca (eds.), 
Peru en numeros, 1990, Lima, 1990, 303. 

Figure 11. Employment by Sector, 1990 

Neither APRA nor the labor movement made much headway 
under the conservative governments in office up to the 1960s. But 
after the reformist military government took power in 1968, 
unionization spread rapidly. More new unions were given legal 
recognition from 1968 to 1978 than in all prior Peruvian history: 
there were 2,152 recognized unions in 1968 and 4,500 by 1978. 
The new unions, less tied to APRA, began to strike out more on 
their own to undertake joint negotiations and demonstrations with 
community groups of all kinds. The military government began 
to regard unions less as allies and more as sources of opposition, 
and in fact labor became a center of resistance to military author- 
ity all through the 1970s. 

Although the Velasco government was committed in many 
respects to support of popular organizations, its relationships with 
organized labor turned into conflicts in two fundamental ways. One 
was purely economic; the government was initially determined to 
prove its ability to avoid inflation, which it identified as evidence 



178 



The Economy 



of the inherent weakness of civilian governments. Increase in wages 
was seen as a threat to control of inflation, and wages in general 
were considered a matter to be decided by government rather than 
unions. 

The second and more general source of conflict was that the 
Velasco government had a strongly corporatist (see Glossary) con- 
ception of social order, in which labor unions had their place but 
had no business trying to change it. The government was deeply 
opposed to theories of class conflict. Labor and capital alike were 
expected to recognize that their interests had to be reconciled for 
the good of the society as a whole. The military welcomed and spon- 
sored public organizations but distrusted any signs of excessive au- 
tonomy. 

Once in open conflict with the two main labor confederations, 
the government tried to undercut them by creating a new one, the 
Federation of Workers of the Peruvian Revolution (Central de 
Trabajadores de la Revolution Peruana — CTRP; see Labor Unions, 
ch. 4). The new confederation received government help in get- 
ting favorable wage settlements and added to the scope of labor 
organization but had little effect in actually weakening the more 
independent unions. 

In the economic contraction following 1975, labor played a more 
active role of social protest than ever before. The first general strike 
in the country's history, in July 1977, seemed to herald a new epoch 
in labor relations in Peru. Labor's support for left-oriented par- 
ties, no longer so predominantly for APRA, became evident in the 
elections of 1980. In terms of wage trends, the more active role 
of organized labor has not seemed to make much difference. Or- 
ganized labor certainly did not stop the devastating fall of real wages 
in the 1980s. Still, average wages for workers under collective bar- 
gaining contracts have been much higher than those for workers 
without them. As of December 1986, the average wage for those 
with contracts was 2.2 times that of workers without them. That 
ratio fell to 1.7 by December 1989, as everyone's real wages 
plunged. 

Poverty 

Whether poverty is measured in terms of family income or in 
terms of social indicators, such as child mortality, it has been greater 
in Peru than would be expected on the basis of the country's aver- 
age income per capita. Historically, this situation has been an ex- 
pression of the country's exceptionally high degree of inequality. 
More recently, especially in the course of the 1980s, it increased 
even more than in the other major Latin American countries, chiefly 



179 



Peru: A Country Study 



because of the drastic deterioration of the economy's overall per- 
formance. 

Measures of poverty based on family income are, of course, de- 
pendent on the particular income level chosen as a dividing line be- 
tween the poor and the non-poor. Both the Economic Commission 
for Latin America and the Caribbean (EC LAC — see Glossary) and 
the World Bank draw two lines — one for a tightly restricted income 
level to define extreme poverty, or destitution, and a second cutoff 
for poverty in a less extreme sense. Destitution refers to income so 
low that it could not provide adequate nutrition even if it were spent 
entirely on food. Poverty in the less extreme sense takes as given 
the proportion of income spent on food in each society and com- 
pares that proportion to the level needed for adequate nutrition. 

A comprehensive analysis of poverty in Latin America for 1970 
concluded that fully 50 percent of Peruvian families were below 
the poverty line and 25 percent were below the destitution level. 
These proportions were both higher than Latin America's cor- 
responding averages — 40 percent in poverty and 19 percent in des- 
titution. In Peru, as in the rest of Latin America, the incidence 
of poverty and destitution was much higher for rural than for urban 
families. Fully 68 percent of rural families were below the poverty 
line, compared with 28 percent of urban families. 

A more recent EC LAC study provides new estimates of the in- 
cidence of poverty for 1980 and 1986. For Latin America, the share 
of families in poverty fell from 40 percent in 1970 to 35 percent 
in 1980 but then rose to 37 percent in the more difficult conditions 
of 1986. For Peru, the incidence of poverty also fell from 50 per- 
cent in 1970 to 46 percent in 1980, but then it increased to 52 per- 
cent by 1986, rising faster than the rest of the region. 

As in 1970, the incidence of poverty and destitution in 1986 re- 
mained higher for rural than for urban families, but the differences 
had lessened. In 1970 the incidence of poverty for rural families 
was 2.4 times that for urban families; in 1986 the ratio was only 
1.4 times. The proportion of rural families in poverty actually fell, 
from 68 percent to 64 percent, while that of urban families rose 
greatly, from 28 percent to 45 percent. 

Cuanto S.A. has developed an ongoing monthly indicator of ex- 
treme poverty in Peru, combining measures of earnings by work- 
ers paid the minimum wage with earnings in the informal urban 
sector and in agriculture. Taking January 1985 as the starting point, 
this index shows a substantial fall in extreme poverty up to De- 
cember 1987, in the first years of the Garcia government's expan- 
sion. But then it shows a dramatic increase as the economy went 
rapidly downhill. At the end of the Garcia administration, in June 



180 



Children in La Molina, 
a town south of Lima 
Courtesy Inter-American 
Development Bank 




1990, the index was 91 percent higher than in December 1987 and 
32 percent higher than its starting point in January 1985. 

Income Distribution 

The distribution of income in Peru has been exceptionally un- 
equal for a long time, but by some measures the degree of inequality 
apparently decreased between 1970 and 1985 (see table 18, Ap- 
pendix). The main causes of inequality have changed as well, in 
some ways for the better and in some for the worse. 

In the pre-World War II years, the dominant causes of inequal- 
ity were a very high concentration of ownership of land and access 
to capital and to education, along with a sociopolitical structure 
that condemned the indigenous rural population to bare subsis- 
tence with little chance of mobility. In the post- World War II period, 
especially since the 1960s, access to education gradually has spread 
to rural areas, and increased migration to the cities has opened 
up new opportunities for people previously blocked in poverty- 
stricken rural occupations. The Agrarian Reform Law of 1969 
wiped out large private land holdings and led in the 1980s to a vastly 
less unequal distribution of individual ownership (see the Velasco 
Government, this ch.). The rise of production and export of coca 
probably also played a role in raising rural incomes in the 1980s. 

More positively, if only for a brief period from 1985 to 1987, 
the agrarian policies of the Garcia government helped stimulate 



181 



Peru: A Country Study 



agricultural markets and production, and controls on prices in the 
industrial sector served to raise greatly the ratio of agricultural to 
industrial prices. As has been noted, the proportion of the rural 
population below the poverty line fell from 68 percent in 1970 to 
64 percent by 1986, while that for urban families was rising from 
28 percent to 45 percent. The positive change for rural families 
was small, and the negative change for urban families was large, 
but because urban poverty was initially less the degree of inequal- 
ity between the rural and urban sectors decreased. 

Other changes in the post-World War II years worked in the 
opposite direction, toward greater inequality. The turn to indus- 
trial protection raised profits of industrialists relative to other forms 
of income and also raised the prices of their products relative to 
those of the agricultural sector. Wages for organized workers in 
manufacturing rose relative to wages of lower-income rural and 
unorganized labor, as well. The pressure of a rapidly growing labor 
force against the society's limited openings for productive employ- 
ment acted in general to keep downward pressure on labor income 
relative to property income. That imbalance worsened in the 1980s 
when the chaotic conditions of the economy as a whole made em- 
ployment conditions more difficult. 

During the period of exceptional economic growth from 1961 
to 1972, the incomes of the poorest 60 percent of Peruvian fami- 
lies increased at a rate of 2.3 percent a year, just matching the rate 
of growth of national income. As growth weakened from the 
mid-1970s, both average real wages and minimum real wages be- 
gan a prolonged decline, and total wages fell relative to incomes 
of property owners. But earnings of the lowest income groups in 
agriculture went up, slightly reducing the percentage of rural fam- 
ilies falling below the poverty line. A World Bank study concludes 
that these changes reduced the degree of inequality between 1972 
and 1985: the share of the poorest 60 percent increased from 18 
to 27 percent of total income. 

An alternative measure of inequality, the Gini index, shows a 
similar improvement. The higher the coefficient, the higher the 
degree of inequality. In the early 1960s and again in the early 1970s, 
Peru had either the highest or the second highest Gini coefficient 
for all the Latin American countries measured, at 0.61 for 1961 
and 0.59 for 1972. By 1985 it had come down to 0.47, far below 
Brazil and only slightiy higher than Colombia. These countries all 
have high inequality by world standards, but in 1985 Peru no longer 
stood out as the worst. 

The latest estimate available, for 1988, suggests that inequality 
had increased slightly compared with 1985, with the Gini coefficient 



182 



The Economy 



rising from 0.47 to 0.50. Although not a drastic change in itself, 
its connotations are worsened by the simultaneous rise in poverty. 
The latter may well be considered to be the more important mat- 
ter: it would not mean much to reduce inequality if that just meant 
more equal sharing of greater poverty. The one clearly positive 
combination of indicators is that for the period 1980-85 the inci- 
dence of poverty fell, if only slightly, for the rural households who 
have always constituted the majority of Peru's poor. 

Economic Policies and Their Consequences 

Peru's long reliance on a relatively open economy allowed the 
country to reach a level of income per capita above the average 
for Latin America at the start of the 1960s but with exceptionally 
high degrees of poverty and inequality. Its open economy also left 
the country behind the leading countries of the region in terms of 
development of entrepreneurship and technology, as well as ca- 
pacity of the public sector for effective policy implementation. Popu- 
lar dissatisfaction and pressures for change had objective reasons 
behind them. 

The military government of General Velasco changed the scene 
completely with its radical reforms of 1968-72. Peru has never been 
the same since. But the changes did not lead to any sustainable 
new economic strategy: the old balance was destroyed, but no via- 
ble new one was created to replace it. All the governments since 
Velasco have been trying to find new solutions by reversing their 
predecessors' policies, so far without notable success. 

The Velasco Government 

The economic strategy of the Velasco government was shaped 
by a concept frequently advocated in Latin America but rarely put 
into practice. The idea was to find a "third way" between capital- 
ism and socialism, with a corporatist society much more inclusionary 
than that possible under capitalism but without rejecting private 
ownership or adopting any of the compulsory methods identified 
with communism. Under this strategy, land reform was designed 
to override existing property interests in order to establish cooper- 
ative ownership, rejecting both individual private farming and state 
farms. Promoting worker participation in ownership and manage- 
ment was intended to reshape labor relations. Foreign influences 
were reduced through tight restrictions on foreign investment and 
nationalization of some of the largest foreign firms. On a more fun- 
damental plane, the Velasco government saw its mission as one 
of eliminating class conflict and reconciling differences among in- 
terest groups within its own vision of a cooperative society. 



183 



Peru: A Country Study 
Land Reform 

The most striking and thorough reform imposed by the Velasco 
government was to eliminate all large private landholdings, con- 
verting most of them into cooperatives owned by prior workers on 
the estates. The reform was intended to destroy the basis of power 
of Peru's traditional elite and to foster a more cooperative society 
as an alternative to capitalism. Such social-political purposes ap- 
parently dominated questions of agricultural production or any 
planned changes in patterns of land use. It was as if the questions 
of ownership were what mattered, not the consequences for out- 
put or rural incomes. In fact, the government soon created a sys- 
tem of price controls and monopoly food buying by state firms 
designed to hold down prices to urban consumers, no matter what 
the cost to rural producers. 

As mentioned earlier, the cooperatives had very mixed success; 
and the majority were converted into individual private holdings 
during the 1980s. The conversions were authorized in 1980 by 
changes in the basic land-reform legislation and were put into ef- 
fect after majority votes of the cooperative members in each case. 
The preferences of the people involved at that point clearly went 
contrary to the intent of the original reform. But the whole set of 
changes was not a reversion to the prereform agrarian structure. 
In fact, the conversions left Peru with a far less unequal pattern 
of landownership than it had prior to the reform and with a much 
greater role for family farming than ever before in its history. 

Labor and Capital in the Industrial Sector 

In line with its basic conception of social order, the military 
government also created a complex system of "industrial commu- 
nities." Under this system, firms in the modern sector were re- 
quired to distribute part of their profits to workers in the form of 
dividends constituting ownership shares. The intent was to con- 
vert workers into property owners and property ownership into a 
form of sharing for the sake of class reconciliation. But in prac- 
tice, the system never functioned well. The firms did all they could 
to avoid reporting profits in order to postpone sharing ownership, 
sometimes by setting up companies outside the system to which 
they channeled profits, sometimes by adjusting the books, and in 
general by keeping one step ahead of intended regulations. A small 
fraction of the industrial workers gained shares in firms, but as 
a rule workers were not so much interested in long-term claims 
of ownership as they were in immediate working conditions and 
earnings. For organized labor, the whole approach seemed an 



184 



Harvesting hay near Huancayo, Junin Department 
Courtesy International Labor Organization 

attempt to subvert any role for union action and to make organi- 
zation irrelevant. The system was not popular with either side. It 
was quickly abandoned when the more conservative wing of the 
military took power away from General Velasco in 1975. 

Attempted reform of labor relations in the mid-1970s also in- 
cluded severe restrictions on rights to discharge workers once they 
passed a brief trial period of employment. A review process set up 
to examine disputes was implemented in a way that made discharges 
practically impossible. Businesspeople circumvented the restrictions 
to some degree by hiring workers on a temporary basis up to the 
point at which they would have to be kept and then letting them 
go before the restrictions applied. Businesspeople remained unremit- 
tingly hostile to this type of regulation, primarily on the grounds 
that it took away their main means of exercising discipline over 
their workers. This form of regulation was also eliminated shortly 
after Velasco lost power. 

Protection and Promotion of Industry 

Along with the intention of resolving internal class conflict, the 
Velasco government determined to lessen Peru's dependency on 
the outside world. The two most important components of the 
strategy were a drive to promote rapid industrialization and an 



185 



Peru: A Country Study 

attack on the role of foreign firms. In contrast to the industrializa- 
tion strategies of most other Latin American countries, the inten- 
tion of the Velasco regime was to industrialize without welcoming 
foreign investment. 

The preceding Belaunde administration had started Peru on the 
path of protection to promote industry, and in this respect the 
Velasco government reinforced rather than reversed the existing 
strategy. Beyond the usual recourse to high tariffs, Velasco 's govern- 
ment adopted the Industrial Community Law of 1970 that gave 
any industrialist on the register of manufacturers the right to de- 
mand prohibition of any imports competing with his products. No 
questions of exceptionally high costs of production, poor product 
quality, or monopolistic positions fostered by excluding import 
competition were allowed to get in the way. Before the succeeding 
government of General Francisco Morales Bermudez Cerrutti 
(1975-80) began to clean up the battery of protective exclusions 
in 1978, the average tariff rate reached 66 percent, accompanied 
by quantitative restrictions on 2,890 specific tariff positions. 

In addition to the protective measures, the Velasco government 
promoted industrial investment by granting major tax exemptions, 
as well as tariff exemptions on imports used by manufacturers in 
production. The fiscal benefits given industrialists through these 
measures equaled 92 percent of total internal financing of indus- 
trial investment in the years 1971 through 1975. 

Investment rose strongly in response to these measures, as well 
as to the concurrent rise in aggregate demand. But the tax exemp- 
tions also contributed to a rising public-sector deficit and thereby 
to the beginning of serious inflationary pressure. In addition, the 
exemptions from tariffs given to industrialists on their own imports 
of equipment and supplies led to a strong rise in the ratio of im- 
ports to production for the industrial sector. 

Nationalizations and State Firms 

The industrialization drive was meant to be primarily a Peru- 
vian process not totally excluding foreign investors but definitely 
not welcoming them warmly. In that spirit, the Velasco regime 
immediately nationalized IPC in October 1968 and, not long after 
that, the largest copper-mining company, while taking over other 
foreign firms more peacefully through buy-outs. The government 
put into place new restrictions on foreign investment in Peru and 
led the way to a regional agreement, the Andean Pact (see Glos- 
sary), that featured some of the most extensive controls on foreign 
investment yet attempted in the developing world. 



186 



The Economy 



The decision to nationalize the foreign oil firm was immensely 
popular in Peru. It was seen as a legitimate response to many years 
of close collaboration between the company, which performed po- 
litical favors, and a series of possibly self-interested Peruvian presi- 
dents, who, in exchange, preserved the company's exclusive drilling 
rights. Nationalization was perhaps less a matter of an economic 
program than a reaction to a public grievance, a reaction bound 
to increase public support for the new government. 

Subsequent nationalizations and purchases of foreign firms were 
more explicitly manifestations of the goals of building up state 
ownership and reducing foreign influence in Peru. The leaders of 
the military government subscribed firmly to the ideas of depen- 
dency analysis (see Glossary), placing much of the blame for 
problems of development on external influences through trade and 
foreign investment. Foreign ownership of natural resources in par- 
ticular was seen as a way of taking away the country's basic wealth 
on terms that allowed most of the gains to go abroad. Ownership 
of the resources was expected to bring in revenue to the govern- 
ment, and to the country, that would otherwise have been lost. 

In contrast to its abrupt nationalization of the IPC and then of 
the largest copper mining company, the government turned mainly 
to purchases through negotiation to acquire the property of the 
International Telephone and Telegraph Company (ITT) and for- 
eign banks. Partly in response to United States reactions to the 
earlier nationalizations, and perhaps also partly in response to the 
realization that foreign investment might play a positive role in 
the industrialization drive, the government began to take a milder 
position toward foreign firms. But at the same time, it pursued 
a policy of creating new state-owned firms, in a sense competing 
for position against domestic private ownership, as well as against 
foreign ownership. 

State ownership of firms was, of course, consistent with the na- 
tionalizations but reflected a different kind of policy objective. 
Whereas the nationalizations were intended to gain greater Peru- 
vian control over the country's resources and to reduce the scope 
of foreign influence, the proliferation of state-owned firms was 
meant to increase direct control by the government over the econ- 
omy. State firms were seen as a means to implement government 
economic policies more directly than possible when working through 
private firms, whether domestic or foreign-owned. The goal was 
not to eliminate the private sector — it was encouraged at the same 
time by tax favors and protection — but to create a strong public 
sector to lead the way toward the kind of economy favored by the 
state. 



187 



Peru: A Country Study 

The new state firms created in this period established a signifi- 
cant share of public ownership in the modern sector of the econ- 
omy. By 1975 they accounted for over half of mining output and 
a fifth of industrial output. One set of estimates indicates that enter- 
prises under state ownership came to account for a higher share 
of value added than domestic private capital: 26 percent of GDP 
for the state firms, compared with 22 percent for domestic private 
firms. The share produced by foreign-owned firms dropped to 8 
percent from 21 percent prior to the Velasco government's reforms. 

Contrary to the expectation that the earnings of the state firms 
would provide an important source of public financing for develop- 
ment, these companies became almost immediately a collective 
drain. In some measure, the drain was a result of decisions by the 
government to hold down their prices in order to lessen inflation 
or to subsidize consumers. In addition, deficits of the state-owned 
firms were aggravated by the spending tendencies of the military 
officers placed in charge of company management and by inade- 
quate attention to costs of production. The collective deficits of the 
state enterprises plus the subsidies paid directly to them by the 
government reached 3 percent of GDP by 1975. State enterprises 
were not able to finance more than about one-fourth of their in- 
vestment spending. The government attempted to answer the in- 
vestment requirements of the state firms by allowing them to borrow 
abroad for imported equipment and supplies. They did so on a 
large scale. The external debt rose swiftly, for this and for other 
reasons discussed below. 

Nationalizations and the creation of new state firms stopped 
abruptly after Velasco lost power. In 1980 the Belaunde govern- 
ment announced a program to privatize most of the state firms, 
but it proved difficult to find private buyers, and few of the firms 
were actually sold. In the opposite direction, the subsequent Garcia 
government, in addition to nationalizing in 1985 the offshore oil 
production of the Belco Corporation, a United States company, 
tried in 1987 to extend state ownership over banks remaining in 
private hands. The attempted banking nationalization created a 
storm of protest and was eventually ruled to be illegal. The failures 
under both Belaunde and Garcia to change the balance left the state- 
enterprise sector basically intact until Fujimori implemented major 
changes. 

Macroeconomic Imbalance: Domestic and External 

Whatever the promises and the costs of the many kinds of reform 
attempted by the Velasco government, the ship sank because of 
inadequate attention to balances between spending and productive 



188 



Miner about to enter 
the 4,000-meter-high 
Mina Proano 
multimineral mine 
Courtesy Inter-American 
Development Bank 




Miners drill dynamite holes 
at the Mina Raul open-pit 
copper mine near Arequipa. 
Courtesy Inter-American 
Development Bank 




189 



Peru: A Country Study 

capacity, and between export incentives and import demand. The 
Velasco government inherited recessionary conditions in 1968, with 
a positive external balance and productive capacity readily avail- 
able for expansion. It maintained effective restraint on spending 
and deficits for several years but then let things get out of control. 
The central government's deficit was no more than 1 percent of 
gross national product (GNP — see Glossary) in 1970, but its own 
deficit plus that of the greatly expanded group of state firms reached 
10 percent of GNP by 1975. Correspondingly, the external current- 
account balance was positive in the period 1968-70 but showed 
a deficit equal to 10 percent of GNP by 1975. 

The external deficit was driven up primarily by high rates of 
growth of domestic demand and production through 1974. But in 
addition, the government's policy of holding to a fixed nominal 
exchange rate, in an increasingly inflationary context, allowed the 
real exchange rate to fall steadily from 1969 to 1975. The govern- 
ment refused to consider devaluation for fear it would worsen in- 
flation and managed to avoid it by borrowing abroad to finance 
the continuing deficit. By 1975 external creditors had lost confi- 
dence in Peru's ability to repay its debts and began to put on the 
brakes. Whether because of such external pressure or because of 
growing internal opposition to the increasingly arbitrary decisions 
of the government, the Peruvian military decided to replace Velasco 
in 1975. The experiment ended on a note of defeat, not so much 
of its objectives as of its methods. 

The Search for New Directions, 1975-90 

The head of the second phase of the military government, General 
Morales Bermudez, reoriented Peru's economic strategy in much 
more conservative directions. Many of the specific Velasco reforms 
were dropped, although land reform and the state enterprise sec- 
tor remained intact. Because of pressure from the IMF, average 
tariff rates were cut from 66 percent in 1978 to 34 percent by 1980, 
and the enormous battery of specific quantitative restrictions on 
trade was trimmed down greatly: the number of tariff positions 
under quantitative controls fell from 2,890 in 1978 to 124 by 1980. 

On the side of macroeconomic management, the second-phase 
military government put into effect a desperately needed correc- 
tion of the exchange rate in order to stimulate exports and greatly 
reduce public-investment spending. The exchange-rate policy 
worked well, achieving the country's first significant growth of 
manufacturing exports. Peru's share of the manufacturing exports 
of nine leading Latin American countries increased from 2 per- 
cent for 1970-74 to 10.9 percent for 1975-79. Accompanied by 



190 



The Economy 



better prices for traditional exports, manufacturing exports helped 
create a substantial current-account surplus by the end of the de- 
cade. But devaluation fed back into inflation through price increases 
for imports and exports, and continuing rapid growth of the money 
supply helped spread the inflationary effects of devaluation through 
the whole economy. 

The Second Belaunde Government, 1980-85 

The return to democracy allowed Peruvians to choose among 
strongly left, strongly conservative, or middle-of-the-road parties. 
They chose Belaunde and his party as the middle road, but it led 
nowhere. The Belaunde government tried to return the economy 
to a more open system by reducing barriers to imports, implement- 
ing financial reforms intended to foster private markets, and revers- 
ing the statist orientation of the Velasco system. But the new 
approach never had a chance to get very far because of a series 
of macroeconomic problems. On one side, the government was 
rightly concerned about continuing inflation but made the mistake 
of focusing the explanation on monetary growth arising from the 
export surplus it inherited at the start. That position made it seem 
undesirable to continue trying to promote exports and desirable 
to raise domestic spending and imports. On the other side, Presi- 
dent Belaunde 's personal and political objectives included using 
public investment actively to develop the interior of the country 
and to answer evident needs for improved infrastructure. Seeing 
the export surplus as the key macroeconomic source of imbalance, 
the government decided to eliminate it by removing import re- 
strictions, slowing nominal devaluation to allow the real exchange 
rate to appreciate, and increasing government investment spending. 

The real exchange rate appreciated through 1981 and 1982, 
public-sector investment rose 54 percent in real terms from 1979 
to 1982, and public-sector consumption rose 25 percent during the 
same three-year period. The combination effectively turned the 
current-account surplus into a large deficit, as increased spending 
plus import liberalization practically doubled imports of goods and 
services between 1979 and 1981. The appreciation also turned 
manufacturing exports back downward, and a plunge in external 
prices of primary exports brought them down too. The mistake 
of focusing on the earlier export surplus as the main cause of infla- 
tion became clear: the increases in spending led to a leap of infla- 
tion despite the return to an external deficit. The rate of inflation 
went from 59 percent in 1980 to 111 percent by 1983. 

Nothing improved when the government then tried to go into 
reverse with contractionary macroeconomic policies and renewed 



191 



Peru: A Country Study 

depreciation. Output plunged, but inflation once again went up 
instead of down, to 163 percent by 1985. By this time, pessimism 
about the government's capacity to solve anything, inflationary 
expectations turning into understandable convictions, and the price- 
increasing effect of devaluation all combined to give Peru a seem- 
ingly unstoppable inflation despite the elimination of anything that 
might be considered excess demand. The government apparentiy 
lost its sense of direction, retreated from its attempt to reopen the 
economy by returning to higher tariff levels, and otherwise did lit- 
tle except wait for its own end in 1985. 

The Garcia Government, 1985-90 

With the market-oriented choice of economic strategy discredited 
by results under Belaunde, Peruvians voted for the dynamic 
populist-reformist promise of Garcia and responded enthusiasti- 
cally to his sweeping changes. Garcia' s program worked wonders 
for two years, but then everything began to go wrong. 

The main elements of the economic strategy proposed by the 
Garcia government were full of promise. They recognized the prior 
neglect of the agricultural sector and called for redirecting public 
programs toward promotion of agricultural growth and reduction 
of rural poverty. Correspondingly, economic activity was to be de- 
centralized to break down its high concentration in Lima, and within 
the cities resources were to be redirected away from the capital- 
intensive and import-intensive modern sector to the labor-intensive 
informal sector. A strategy of concertacion (national understanding) 
with private business leaders on economic issues was to be used 
systematically to avoid disruptive conflict. Problems of external 
balance were to be answered both by restructuring production to 
lessen dependence on imports and by reorienting toward higher 
exports over the long-term. 

These goals for structural change could have improved the effi- 
ciency of resource allocation while doing a great deal to lessen 
poverty. But the goals clearly required both time and the ability 
to restore expansion without worsening inflation and external 
deficits. The government initially emphasized such macroeconomic 
objectives as necessary conditions for the structural changes. The 
first step was to stop the built-in inflationary process, but to do 
it without adopting orthodox measures of monetary and fiscal re- 
straint. 

To stop inflation, the government opted for heterodox policies 
of control within an expansionary program. Prices and wages in 
the modern sector were to be fixed, after an initial one-shot in- 
crease in wage rates. The increase in wages was intended to raise 



192 



The Economy 



living standards of workers and stimulate production by raising 
sales to consumers. To offset the effects of higher wages on costs 
of production, financial costs of the business sector were cut by 
intervention in order to reduce and control interest rates. After mak- 
ing one adjustment of the exchange rate to minimize negative ef- 
fects on exports, the government stopped the process of continuing 
devaluation in order to help hold down inflation. Imports were 
rightly expected to go up as the economy revived; to help finance 
them, Garcia made his controversial decision to stop paying ex- 
ternal debt service beyond 10 percent of the value of exports. 
Unorthodox as they were, all the pieces seemed to fit. At least, 
they went together well at the start under conditions of widespread 
idle capacity, with an initially strong balance-of-payments position. 

The macroeconomic measures worked wonders for production. 
GDP shot up 9.5 percent in 1986 and a further 7.7 percent in 1987. 
Manufacturing output and construction both increased by more 
than one-fourth in these two years. An even greater surprise was 
that agricultural production per capita went up, running counter 
to its long downward trend. And the rate of inflation came down 
from 163 percent in 1985 to 78 percent in 1986, although it edged 
back up to 86 percent in 1987. In response to stronger market con- 
ditions and perhaps also to growing confidence that Peru's eco- 
nomic problems were at last being attacked successfully, private 
fixed investment went up by 24 percent in 1986, and capital flight 
went down. 

The government avoided any spending spree of its own: central 
government spending was actually reduced in real terms each year. 
But because the government also reduced indirect taxes in order 
to encourage higher private consumption and to reduce costs for 
private business, its originally small deficit grew each year. The 
economic deficit of the nonfinancial public sector as a whole (ex- 
cluding interest payments) went up from 2.4 percent of GDP in 
1985 to 6.5 percent by 1987. 

Although the government reduced its total spending, it managed 
to support a new public-works program to provide temporary em- 
ployment and to direct more resources to rural producers as in- 
tended in its program for structural change. Three lines of policy 
helped especially to raise rural incomes. The first was to use gener- 
ous guaranteed prices for key food products. The second was to 
provide greatly increased agricultural credit, financed essentially 
by credit from the Central Bank. The third was to exempt most 
of the non- guaranteed agricultural prices from controls, allowing 
their prices to rise sharply relative to those of industrial products 
from the modern sector. From July 1985 to December 1986, prices 



193 



Peru: A Country Study 



of goods and services not under control increased more than three 
times as much as those under control. Wholesale prices in manufac- 
turing increased 26 percent, but those for agricultural products in- 
creased 142 percent. 

Besides higher employment and living standards, the first two 
years of economic revival seemed to offer a break in the cycle of 
rising rural violence. The flow of displaced peasants from the Sierra 
eased, and a good many peasants began to return to the country- 
side. That reverse might be explained by Garcia 's initial efforts 
to reduce reliance on military force to combat the guerrillas and 
thereby to lessen the degree of two-way violence driving people out 
of their villages. But the trend may also have been a response to 
the reality of better economic conditions and earning possibilities 
in the agricultural sector. 

The first two years of the Garcia government gave new hope 
to the people of Peru, with rising employment, production, and 
wages suggesting a clear turn for the better after so many years 
of increasing difficulties. It was hence doubly tragic to see the whole 
process unravel so quickly, once things started going wrong again. 
The first sign of trouble came, as it often had, from the balance 
of payments. The economic boom naturally raised imports swiftly, 
by 76 percent between 1985 and 1987. But the real exchange rate 
was allowed to fall by 10 percent in 1986 and by a further 9 per- 
cent in 1987. The boom pulled potential export supply into the 
domestic market, and the fall in the real exchange rate reduced 
incentives to earn foreign exchange. Exports fell slightly in 1985 
and remained below that level through 1987. The external cur- 
rent account went from a surplus of US$127 million in 1985 to 
deficits of nearly US$1.1 billion in 1986 and nearly US$1.5 bil- 
lion in 1987. 

The Garcia government reacted to the growing external deficit 
in exactly the same way as had the governments of Velasco and 
of Belaiinde — by postponing corrective action while the problem 
continued to worsen. As before, a major fear was that devaluation 
would worsen inflation. Inflationary pressures were, in fact, be- 
ginning to worsen behind the facade of control. To some degree, 
they were growing in response to the high rate of growth of de- 
mand and output, reducing margins of previously underutilized 
productive capacity. But more explosive pressures were being built 
up by relying on price controls that required a dramatic expan- 
sion of credit to keep the system in place. Prices of public- sector 
services — gasoline above all, oil products in general, electricity, tele- 
phones, and postal services — were frozen at levels that soon be- 
came almost ridiculous in real terms. The restrictions on prices 



194 



The Economy 



charged by state firms drove them ever deeper into deficits that 
had to be financed by borrowing. The borrowing came from wher- 
ever it could, but principally from the Central Bank. At the same 
time, Central Bank credit rose steadily to keep financing agricul- 
tural expansion. Still another direction of Central Bank credit cre- 
ation was the financing used to handle the government's new 
structure of multiple exchange rates. Differential rates were used 
to hold down the cost of foreign exchange for most imports, again 
with the dominant goal of holding down inflation, while higher 
prices of foreign exchange were paid to exporters to protect their 
incentives to export. The Central Bank thus paid more for the for- 
eign exchange it bought than it received for the exchange it sold. 

The term used for these leakages — for extensions of Central Bank 
credit that did not count in the government's budget deficit — is 
the "quasi-fiscal deficit." Its total increased from about 2 percent 
of GDP in 1985 to about 4 percent in 1987. Meanwhile, the govern- 
ment's tax revenue fell steadily in real terms, partly because of tax 
reductions implemented to hold down business costs and partly be- 
cause of the effect of inflation in cutting down the real value of 
tax payments. Added together, the fiscal deficit plus the quasi-fiscal 
deficit increased from 5 percent of GDP in 1985 to 11 percent by 
1987. 

The two horsemen of this particular apocalypse — the external 
deficit and the swift rise of Central Bank credit — would have made 
1988 a bad year no matter what else happened. But President Garcia 
guaranteed financial disaster by his totally unexpected decision in 
July 1987 to nationalize the banks not already under government 
ownership. No one has yet been able to explain why he decided 
to do so. It would not seem to have been a move necessary for any 
component of his program, or needed for government control in 
a banking sector in which it already had a dominant position. In 
any case, the action underlined the unilateral character of economic 
policy action under Peru's presidential system (see The Garcia 
Government, 1985-90, ch. 4) and wrecked any possibilities of fur- 
ther cooperation with private sector leadership. Private investment 
began to fall, and the whole economy followed it down shortly 
thereafter. 

The Garcia government tried a series of major and minor new 
policy packages from early 1988 into 1990 to no avail. The new 
policies never succeeded in shutting off the rapid infusion of Cen- 
tral Bank credit that was feeding inflation, even when they did 
succeed in driving production down significantly in 1989. Manufac- 
turing production fell 18 percent in that year, agricultural output 
3 percent, and total GDP 11 percent. Simultaneously, inflation 



195 



Peru: A Country Study 



increased from a record 666 percent in 1988 to a new record of 
3,399 percent for 1989. The one positive change was the external 
current-account deficit: the fall in domestic production and income 
was so steep that the current account went from a deep deficit to 
a substantial surplus. The internal cost was perhaps clearest in terms 
of real wages: the minimum wage in real terms for urban labor 
fell 61 percent between 1987 and 1989, and average real wages in 
manufacturing fell 59 percent. 

The Fujimori Government, 1990-91 

The Fujimori administration began with yet another reversal of 
practically all the economic policies of the preceding government, 
in conditions that clearly required drastic corrective action. Its main 
immediate target was to stop the runaway course of inflation. Be- 
yond that, the goals included repudiating protection and import 
substitution, returning to full participation in the world trading 
and financial systems, eliminating domestic price controls and sub- 
sidies, raising public revenue and holding government spending 
strictly to the levels of current revenue, initiating a social emer- 
gency program to reduce the shock of adjustment for the poor, and 
devoting a higher share of the country's resources to rural invest- 
ment and correction of the causes of rural poverty. In practice, 
new measures came out in bits and pieces, dominated by immedi- 
ate concern to stop inflation; actions taken in the first year did not 
complete the program. 

Preoccupation with inflation was natural enough, after the steep 
rise of 1989 and the months immediately preceding the change of 
government. The monthly rate of inflation ranged between 25 per- 
cent and 32 percent in the second half of 1989, exceeded 40 per- 
cent in June 1990, and amounted to 78 percent by July. The deficit 
of the central government increased from 4 percent of GDP in Jan- 
uary 1990 to 9 percent by May. The money supply of the country 
increased six times over from January to the end of July. The new 
government had to act quickly, and did. 

The most dramatic immediate action was to eliminate price con- 
trols for private- sector products and to raise prices of public-sector 
products to restore financial balance for public firms. The price 
of gasoline, previously driven down to about one-eighth its price 
in the United States, was multiplied by thirty times. For the con- 
sumer price index (CPI — see Glossary), the shocks caused an in- 
crease of 136 percent in one day. 

Eliminating price controls in the private sector and raising prices 
charged by state firms had three objectives. First, the price increases 
for the public-sector firms and government services were meant 



196 



The Economy 



to restore revenue to a level that would allow the government to 
stop borrowing from the Central Bank. Second, the rise in prices 
was intended to reduce aggregate demand by cutting the liquidity 
of business and the purchasing power of the public. Third, with 
everything priced far higher relative to public purchasing power, 
it was expected that market forces would begin to operate to drive 
some prices back down, reversing the long trend of increases in 
order to help break the grip of inflationary expectations. 

To back up the impact of the price shocks, the government 
declared that it would keep its own expenditure within the limit 
of current revenue and stop the other two large streams of Central 
Bank credit creation: Central Bank financing for agricultural credit 
and for the system of subsidies supporting differential exchange 
rates. The multiple exchange rates in effect under Garcia were to 
be unified, and the unified rate was to be determined by market 
forces. Further, competition from imports to restrain inflation and 
access to imported supplies for production would both be improved 
by taking away quantitative restrictions and reducing tariff rates. 

The new policies helped greatly to bring down the rate of infla- 
tion, although they fell short of accomplishing full stabilization. 
Against an inflation rate that had reached approximately 2,300 per- 
cent for the twelve months to June 1990, the rate of 139 percent 
for the twelve months to December 1991 can be seen as a dramatic 
improvement. But the latter was still more than double the govern- 
ment's intended ceiling for 1991 and still extremely high relative 
to outside world rates of inflation. The last quarter of 1991 looked 
more promising, with the monthly rate down to 4 percent, but it 
had risen to 7 percent by March 1992. Inflationary dangers clearly 
remained troublesome, especially in view of two factors that should 
have stopped inflation more decisively: a deeply depressed level 
of domestic demand and an unintended increase in the real ex- 
change rate, making dollars cheaper. 

Domestic demand has been held down by the combination of 
the price shock at the start of the stabilization program, steeply 
falling real wages, reduced government deficits, and much tighter 
restraint of credit. All these were deliberate measures to stop in- 
flation, accepting the likely costs of higher unemployment and re- 
straint of production as necessary to that end. In 1990 GNP fell 
3.9 percent, aggravating the plunge of 19 percent between 1988 
and 1990. In 1991 production turned up slightly, with a gain of 
2.9 percent in GNP. That situation left output per capita essen- 
tially unchanged from 1990 and at 29 percent below its level a de- 
cade earlier. 



197 



Peru: A Country Study 

The incomplete success in stopping inflation created an extremely 
difficult policy conflict. Recovery could in principle be stimulated 
by more expansionary credit policies and lower interest rates, which 
would favor increased investment, depreciation of the currency to 
help producers compete against imports, and improved exports. 
But continuing inflation and the fear of accelerating its rate of in- 
crease argued instead for keeping a very tight rein on credit and 
thereby blocked the actions needed for recovery. This conflict be- 
came particularly acute over the question of what to do about the 
exchange note: the real exchange rate went in exactly the wrong 
direction for recovery by appreciating when depreciation was both 
expected and needed. 

The decision to remove controls on the exchange rate had been 
expected to lead to a much higher foreign-exchange price, to en- 
courage exports, and to permit import liberalization without a surg- 
ing external deficit. But when the rate was set free, the price of 
dollars went down instead of going up. That initial effect could 
be explained by the tight restraints imposed on liquidity, which 
drove firms and individuals who held dollar balances to convert 
them to domestic currency in order to keep operating. This move- 
ment should presumably have gone into reverse when holdings of 
dollars ran out, but fully eighteen months later no reversal had oc- 
curred. Dollars remained too cheap to make exports profitable and 
too cheap for many producers to compete against imports for several 
reasons, including the continuing influx of dollars from the drug 
trade into street markets and then into the banking system. A sec- 
ond reason has involved the continuing low level of domestic in- 
come and production, and corresponding restraint of demand for 
imports as compared with what they would be in an expanding 
economy. But perhaps the most fundamental reasons have been 
the continuing squeeze on liquidity in terms of domestic currency 
and the resulting high rates of interest for borrowing domestic cur- 
rency, which strongly favor borrowing dollars instead or repatri- 
ating them from abroad. All this means that the economy has had 
no foreign-exchange problem, but also that incentives to produce 
for export have been held down severely, when both near- term 
recovery and longer-term growth badly need the stimulus of ris- 
ing exports. 

The government was more successful in the part of its program 
aimed at trade liberalization. As has been noted, the average tariff 
rate was cut greatly in two steps, in September 1990 and March 
1991. Quantitative restrictions were eliminated, and the tariff struc- 
ture was greatly simplified. Effective protection was brought down 



198 



The Economy 



to a lower level than at any point since the mid-1960s, with a more 
coherent structure that left much less room for distorted incentives. 

Although stabilization and structural reform measures have thus 
shown some success, the government's program has not taken ade- 
quate action to prevent worsening poverty. Its announced programs 
of short-term aid in providing food and longer-term redirection 
of resources to get people out of poverty by programs designed to 
help them raise their productivity have not yet been implemented 
in any meaningful way. Private charitable agencies, the United 
Nations (UN), and the United States Agency for International De- 
velopment (AID) have helped considerably through food grants to 
stave off starvation. But the government itself has done little, either 
to alleviate current strains on the poor or to open up new direc- 
tions that promise gains for them in the future. 

Outstanding Issues 

For many Peruvians, the frustrations of prolonged economic de- 
terioration in the face of such varied attempts to do something about 
it mean that something fundamental has gone wrong, perhaps so 
wrong that mere changes of public policy can do little to help. Such 
fears are certainly understandable and also costly. They encourage 
support for violent reaction, and they also foster great pressure on 
each new government to act quickly, in dramatic new ways, without 
sufficient attention to the likely costs of their actions. Such pres- 
sure may be a key part of the problem. Issues of current policy 
orientation need to be considered in the perspective of Peru's ex- 
tremely dislocated society, but that context argues for great cau- 
tion, as well as for change. The specific issues center on familiar 
conflicts: between the appeal of trying to return to the open econ- 
omy and liberal economic system preceding the 1960s, and the con- 
trary appeal of a more directive use of public policy to correct basic 
structural problems. 

Convictions that something fundamental has gone wrong with 
the country can lead to violence, to emigration as an escape, or 
possibly instead to new consensus on the need to change particu- 
lar constraints of public policy. The SL has advocated an extreme 
answer: traditional society has failed and needs to be swept away. 
For many others who reject violence, the answer has not seemed 
to be much more positive: emigration has become an increasingly 
popular way out for many, including professional people and 
businesspeople who take their capital with them. Although it is truly 
difficult to be certain that a reasonably peaceful recovery remains 
possible, two alternative answers, in different ways, suggest some- 
what more hope for the future. 



199 



Peru: A Country Study 

One interpretation of the deterioration since the mid-1960s is 
that it has been caused by stubbornly misdirected economic poli- 
cies, specifically excessive protection for import substitution, a 
proliferation of internal controls adverse to efficiency and free mar- 
kets, government deficits, and wildly exaggerated monetary ex- 
pansion. That position gains solid support from the results of the 
governments of Velasco and Garcia, plus much of the administra- 
tion under Belaunde. In that light, the Fujimori government's 
return of national policy to an open economy with greatly reduced 
protection and controls and more attention to budget balance is 
genuinely hopeful. The redirection initially offered the promise of 
renewed external help from international financial and develop- 
ment agencies, although that possibility was set back at least tem- 
porarily in April 1992 when the Fujimori government suspended 
democracy in Peru. 

A second nonviolent alternative goes against attempts to return 
to the kind of economic system Peru had prior to the 1960s. The 
old system was neither an equitable system that served to integrate 
the society nor one that favored learning and technical progress. 
The depth of Peru's problems in 1991 seemed to call for more direc- 
tive economic strategies to lessen poverty, pull the industrial sec- 
tor into export competition, and establish a stronger tax base to 
provide noninflationary financing for an active government. Such 
redirection would be fully consistent with reduced protection, 
although it would gain from adding on strong incentives for in- 
dustrial exports. It would need much the same kind of effort to 
maintain fiscal balance as the first alternative, although more 
through higher public revenue and less through cutback of public- 
sector functions. 

Both of these two alternative orientations raise serious questions 
about what is possible. Such questions might be considered on three 
levels: first, can economic growth be revived without making in- 
flation accelerate again; second, can the spread and deepening of 
poverty be reversed; and third, can the Peruvian people regain 
enough confidence in their society to induce renewed investment, 
productive effort, and acceptance of the constraints necessary to 
rebuild? 

To the question on the first level, it is certainly no easy matter 
to revive economic growth without provoking inflation again, given 
all the special handicaps of political uncertainty, growing violence, 
and intense public awareness of past failures to curb inflation. Still, 
nearly all the purely economic conditions for revival without in- 
flation are present: the industrial sector has a great deal of under- 
utilized capacity, both skilled and unskilled labor is available in 



200 



The Economy 



abundance, and the country is in the unusual position of having 
abundant supplies of foreign exchange to finance increased imports 
of supplies needed for rising production. If investment and exports 
can be encouraged, it should be possible to raise production quickly, 
without running into any near- term limitations on the supply side. 

The experience of the first two years of the Garcia government, 
from 1985 to 1987, suggests both the scope for raising output in 
such conditions and the danger of doing too much, too rapidly. 
That experience does not point to any necessary relapse back into 
inflation: it simply underlines the need for methods that are more 
consistent and more careful. The Garcia government's revival was 
crippled quickly because of particular choices that could have been 
avoided. The exchange-rate policy was wholly and unnecessarily 
misdirected. More fundamentally, the degree of stimulus lacked 
any clear relationship to the constraints on how much it was possi- 
ble to do, how fast, and with what financing. The need for ade- 
quate tax revenue and the need for prices of government services 
adequate to cover costs were never faced. To pay more attention 
to internal and external macroeconomic balance would have re- 
quired a slower pace of expansion, but it might then have been 
possible to keep going without explosion. The experience does not 
demonstrate that sustained recovery is practically impossible in 
Peru, only that it has to be done with extreme care because of the 
damage of past misjudgment. 

To the question on the second level — the possibility of seriously 
reducing poverty — the experience under Garcia again suggests both 
grounds for hope and reasons for doubt. That government's com- 
bination of measures was initially favorable for both the rural poor 
and those in the informal urban sector. These measures made a 
notable dent in the degree of extreme poverty in the first two years. 
If the overall expansion had been more moderate, the gains would 
have been less but still positive. Redirection of public investment 
and of credit toward the rural sector must have played a helpful 
role in that brief experience of reducing poverty and inequality, 
as they would under any government if placed within a framework 
of overall balance. 

Promotion of a more labor-intensive structure of production, with 
more rapidly growing employment opportunities for any given level 
of investment, could do a great deal to lessen poverty and inequal- 
ity in the longer run. A necessary condition to move in this direc- 
tion is to avoid overvaluation of the exchange rate, something that 
the Garcia, Velasco, and Belaunde governments were unable to 
do. Overvaluation hurts the poor by making imported capital equip- 
ment and supplies artificially inexpensive, thereby encouraging the 



201 



Peru: A Country Study 



replacement of workers with machinery. Overvaluation is not be- 
yond correction by a government concerned with the problem, 
although it may require intervention to offset perverse market forces 
like those operating in the first year of the Fujimori government. 
The price of foreign exchange needs to be kept high enough to en- 
courage growth of industrial exports, or else more specific mea- 
sures have to be taken to keep them growing, even if this means 
intervening to change the way that market forces are operating. 

Beyond such questions of differential incentives and employment 
opportunities, and of investment and credit for the rural area, seri- 
ous action to alleviate poverty clearly requires a strong public com- 
mitment to provide more nearly equal access to education, to public 
health programs directed to the poor, and to social action to al- 
leviate conditions of mass hunger. The problem with the alterna- 
tive of going back to an open economy with much less of a role 
for government is that it could leave the extent of poverty as great 
as ever, or even discourage public action to do more about it. 
Velasco and Garcia went wrong in many ways, but their efforts 
to change the society were attempts to respond to a real need. To 
go back to the pre- 1960s kind of economic regime might well be 
less costly than to repeat the nightmares of 1988-90, but it would 
leave the human problems of Peru unresolved. 

To the question on the third level — the possibility of restored 
confidence in the society — the answer cannot be in terms of eco- 
nomic analysis. It may be that the shocks of the 1980s and those 
of 1990, combined with the worsening of violence and deteriora- 
tion of the capability of the government to act, will make it difficult 
for a long time to generate rising investment, whether by Peruvi- 
ans or foreign investors. It may be that fear of inflation will para- 
lyze promotional action by the government or, alternatively, that 
long delay will generate overwhelming pressures for violent change. 
Such possibilities are all too real. But the surge of hope in 1985-86 
(and the surge of investment and of production that immediately 
came with it) make fatalism about Peru seem misplaced. Even 
through the confusions of economic policy at that time, including 
a great many costly kinds of interference adverse to efficiency, and 
even in the face of destructive violence, Peru was able to respond 
positively to the temporary turn in a more promising direction. 
Production went up, poverty went down, and the reign of terror 
in the Sierra temporarily lessened. Both poverty and violence were 
worse in 1991, but the background of economic policy distortions 
had in part been corrected. 

It is probably true that Peru has a fundamental problem that 
underlies the long downward trend of its economic performance. 



202 



The Economy 



It is not just the misdirection of excessive protection, government 
intervention, and excess spending. It is the severity of poverty and 
inequality. Too many people have serious grounds to reject the 
society because it has done so little to provide them any hope. The 
governments since the mid-1960s all tried to find some new way 
to deal with this basic weakness. Their methods were terribly 
damaging. It is fairly easy to see what went wrong in each case, 
if not so easy to see how to work out the interlocking problems at 
the beginning of the 1990s. Recovery of production is surely pos- 
sible with better designed economic policies, but to keep society 
intact requires that the government go beyond reactivation of the 
economy to include more effective ways to reduce poverty on a 
sustained basis. 

* * * 

The Peruvian Experiment, edited by Abraham F. Lowenthal, and 
The Peruvian Experiment Reconsidered, edited by Cynthia McClintock 
and Lowenthal, cover the Velasco period and its consequences. 
Rosemary Thorp and Geoffrey Bertram's Peru 1890-1977 'is a com- 
prehensive economic history. Paul E. Gootenberg's Between Silver 
and Guano examines the roles of nationalism and liberalism in shap- 
ing the country's development. 

On agrarian problems, consult Tom Alberts 's Agrarian Reform 
and Rural Poverty and Adolfo Figueroa's Capitalist Development and 
the Peasant Economy in Peru. On the informal sector, the classic book 
is Hernando de Soto's The Other Path. 

The Garcia government's economic program from 1985 to 1990 
is analyzed in Eva Paus's "Adjustment and Development in Latin 
America," and in Manuel Pastor, Jr. and Carol Wise's "Peru- 
vian Economic Policy in the 1980s." Thorp's Economic Management 
and Economic Development in Peru and Colombia examines this period 
through a comparison of the ways the two countries have managed 
their long-term problems of development. Peru's Path to Recovery, 
edited by Carlos E. Paredes and Jeffrey D. Sachs, is a thorough 
survey of Peru's problems at the start of the Fujimori government 
in 1990, with many proposals for corrective action. Particularly 
useful monthly Peruvian publications include The Andean Report and 
Peru Economico. (For further information and complete citations, 
see Bibliography.) 



203 



Chapter 4. Government and Politics 



Mochican ear ornament of gold and precious stones representing a warrior 
with a sling 



PERU, IN 1980, was one of the first countries in South America 
to undergo the transition from long-term institutionalized military 
rule to democratic government. By 1990, however, Peru was in 
the midst of a social, economic, and political crisis of unprecedented 
proportions that threatened not only the viability of the democratic 
system but also civil society in general. 

More than a decade of steep economic decline had resulted in 
a dramatic deterioration in living standards for all sectors of soci- 
ety and a vast increase in the large proportion of society that was 
underemployed and below the poverty line. Per capita incomes were 
below their 1960 levels. Accompanying the economic decline in 
the 1980s was a rise in insurgent violence and criminal activity. 
There was also a marked deterioration in the human rights 
situation — over 20,000 people died in political violence during the 
decade. 

The crisis had partial roots in the failure of successive govern- 
ments to implement effective economic policy and to fully incor- 
porate the marginalized (informal; see Glossary) sector of the 
population into the formal economic and political systems. Poli- 
tics were dominated by personalities rather than programs and by 
policy swings from populist policies to neoliberal stabilization 
strategies. 

The concentration of decision-making power in the persona of 
the president and the major swings in policy took an enormous 
toll on the nation's political system and state institutions. The ju- 
dicial and legislative branches, already inadequately funded and 
understaffed, were constantly bypassed by the executive. State in- 
stitutions, meanwhile, already burdened by excessive bureaucracy, 
were virtually inoperative because government resources had all 
but disappeared. Political parties had been increasingly discredited, 
having failed to provide credible alternatives to the malfunction- 
ing state system with which they were associated. Both extrasystem 
movements, such as neighborhood organizations and grassroots 
groups, and antisystem movements, such as guerrilla forces, par- 
ticularly the Shining Path (Sendero Luminoso — SL), had increased 
in size and importance. The breach between the Peruvian state 
and civil society had widened. The political system was fragmented 
and polarized to an unprecedented degree, and society, which was 
immersed in a virtual civil war, had become increasingly praetorian 
(see Glossary) in nature. 



207 



Peru: A Country Study 

Despite the desperate nature of the socioeconomic situation and 
the extent of political polarization, Peru successfully held its third 
consecutive elections in April and June 1990. Agronomist Alberto 
K. Fujimori, a virtual unknown, defeated novelist Mario Vargas 
Llosa by a wide margin. The victory of Fujimori and his Cambio 
'90 (Change '90) front was seen as a rejection of traditional politi- 
cians and parties, as well as of Vargas Llosa's proposed orthodox 
economic "shock" program. 

Despite his wide popular margin, Fujimori faced substantial con- 
straints early on. One was his lack of an organized party base or 
a working majority in either of the two houses of Congress. Another 
was that, as a result of hyperinflation, the lack of government 
resources, and the clear preferences of international lending agen- 
cies, such as the International Monetary Fund (IMF — see Glos- 
sary) and World Bank (see Glossary), he had little choice but to 
implement the orthodox shock program that he had campaigned 
against. 

Although Fujimori made impressive strides during his first year 
in the implementation of structural economic reforms, there was 
substantial popular disaffection because of the high social costs of 
the "Fujishock" program and the government's failure to follow 
through on promises of a social emergency program to alleviate 
those shocks. Resource constraints inherited from the previous 
government severely limited the Fujimori administration's ability 
to act on the social welfare front. Fujimori lost the support of much 
of his Cambio '90 front when he turned to orthodox economics. 
In addition, he was forced to rely on a series of "marriages of con- 
venience" with various political forces in Congress in order to pass 
legislation. He also had to rely on a sector of the army for institu- 
tional support. 

On April 5, 1992, Fujimori suspended the constitution, dissolved 
the Congress and the judiciary, and placed several congressional 
leaders and members of the opposition under house arrest. The 
measures, which were fully supported by all three branches of the 
armed forces, were announced in the name of fighting drug traffic. 
They amounted to an autogolpe (self-coup): a military coup against 
the government led by the president himself. 

Governmental System 

During the first ninety-four days of 1992, Peru was a republic 
with a civilian government, which had a popularly elected presi- 
dent, a bicameral legislature, and an independent judicial branch 
(see fig. 12). Peru's civilian government ended indefinitely as a 
result of Fujimori's autogolpe of April 5, 1992. The constitution of 



208 



Government and Politics 



1979 remained suspended, and its Congress and judiciary remained 
dissolved during the rest of 1992. The government held elections 
for the Democratic Constituent Congress (Congreso Constituyente 
Democratico) on November 22, 1992, and municipal elections on 
January 29, 1993. The following sections describe Peru's legiti- 
mate civilian government as it existed prior to April 5, 1992. 

Constitutional Development 

Until April 5, 1992, Peru was governed according to a constitu- 
tion that became effective with the transition to civilian govern- 
ment in 1980. From the time of the declaration of independence 
by Jose de San Martin on July 18, 1821, up until the constitution 
of 1979, Peru had had ten constitutions. All of them had estab- 
lished a presidential form of government, with varying degrees of 
power concentrated in the executive. The French- and Spanish- 
influenced constitution of 1823, which abolished hereditary mon- 
archy, was the first formal organic law of the Peruvian state drawn 
up by a constituent assembly under a popular mandate. 

The departure of Simon Bolivar Palacios (1824-25, 1826) on Sep- 
tember 3, 1826, ushered in a long period of revolt and instability 
with only brief periods of peace. The presidency changed twelve 
times between 1826 and 1845. During this period, Peru was 
governed under three constitutions — those of 1828, 1834, and 1839. 
There was little variation in the basic form of these constitu- 
tions. All provided for separate executive, legislative, and judicial 
branches; for indirect election of the president and Congress; for 
a centralized regime; and for extensive personal rights and guaran- 
tees. The only major variations were in details regarding specific 
powers of the executive. 

The 1828 constitution moved toward decentralization and showed 
considerable influence by the United States. For example, it pro- 
vided for presidential election by popular vote. In subsequent con- 
stitutions, there was a varying emphasis on executive versus 
legislative power, and gradual, progressive improvements, such as 
the subordination of the military to civilian rule, direct popular 
elections, and the granting of the right to association. The 1839 
constitution extended the presidential term from four to six years, 
with no reelection. 

When Marshal Ramon Castilla (1845-51, 1855-62) emerged as 
dictator in 1845, a period of relative peace and prosperity began. 
The 1856 constitution, promulgated during Castilla' s rule, was 
more liberal and democratic than any of its predecessors. It pro- 
vided for the first time for direct popular election of the president 
and Congress. However, a more conservative constitution was 



209 



Peru: A Country Study 



ELECTORATE 



LEGISLATURE 



CONGRESS 




CHAMBER 


SENATE 


OF 




DEPUTIES 







elects 

nominates 

appoints 



EXECUTIVE 



Y JUDICIARY 



SUPREME COURT 
OF JUSTICE 



PUBLIC 
MINISTRY 



LOCAL AND REGIONAL 
GOVERNMENT 



SUPERIOR 
COURTS 



COURTS OF 
FIRST INSTANCE 



JUSTICES OF 
THE PEACE 



PROVINCIAL 
OFFICES OF THE 
PUBLIC 
PROSECUTOR 



REGIONAL 
(DEPARTMENTAL) 
GOVERNMENTS (12) 



REGIONAL 
ASSEMBLY 
(56 MEMBERS) 



PRESIDENT 



FIRST AND 
SECOND VICE 
PRESIDENTS 



COUNCIL OF MINISTERS 



PRESIDENT, COUNCIL OF 
MINISTERS (PREMIER) 



MINISTERS OF STATE FOR: 

AGRICULTURE 

DEFENSE 

ECONOMY AND FINANCE 

EDUCATION 

ENERGY AND MINES 

FISHERIES 

FOREIGN AFFAIRS 

HOUSING AND CONSTRUCTION 

INDUSTRY, DOMESTIC TRADE, 
TOURISM, AND INTEGRATION 

INTERIOR 

JUSTICE 

LABOR AND SOCIAL PROMOTION 

PUBLIC HEALTH 

TRANSPORTATION AND 
COMMUNICATIONS 



PROVINCIAL MAYORS (17), 
DIRECTLY ELECTED 
REPRESENTATIVES (22), 
REPRESENTATIVES OF 
LOCAL ORGANIZATIONS (17) 



MUNICIPAL 
GOVERNMENTS 



MUNICIPAL 
COUNCIL 



PROVINCIAL 
COUNCIL 



DISTRICT 
COUNCIL 



MAYOR 



Figure 12. Government Structure, 1991 



210 



Government and Politics 



promulgated in 1860 and remained in force, with two brief 
interruptions — 1862-68 and 1879-81 — for sixty years. Although 
it reduced the presidential term to four years (with reelection after 
an intervening term), it greatly increased the powers of the presi- 
dent and provided for a much more centralized government. 
Nevertheless, it laid important bases for the future executive- 
legislative relationship. In particular, it established a requirement 
that cabinet ministers, although responsible to the president, report 
to Congress. Furthermore, it explicitly permitted Congress, at the 
end of each legislative session, to examine the administrative acts 
of the president to determine their conformity with the constitu- 
tion and the laws. 

The 1920 constitution was generally more liberal than its 
predecessor, the 1860 charter, and provided for more civil guaran- 
tees. Although it established a strong executive and lengthened the 
presidential term from four to five years, it placed several new checks 
on that branch. It deprived the president of his traditional right 
to suspend constitutional guarantees during periods of national 
emergency and strengthened the principle of ministerial respon- 
sibility to Congress. In particular, it gave Congress the right to 
force the resignation of ministers by a vote of no confidence. Hav- 
ing promulgated the constitution, however, Augusto B. Leguia y 
Salcedo (1908-12, 1919-30) ignored it almost completely and es- 
tablished himself as one of Peru's strongest dictators. 

The 1933 constitution was, at least in theory, operative until 1980, 
although civilian government was interrupted from 1933 to 1939, 
1948 to 1956, and 1968 to 1980. The 1933 constitution reduced 
presidential powers and instituted a mixed presidential-parliamentary 
system. It also instituted compulsory and secret balloting, as well 
as provisions for religious tolerance and freedom of speech. The 
president could not remove or nominate cabinet members without 
parliamentary consent. This situation resulted in a considerable 
number of executive-legislative stalemates, the most notable of 
which occurred during the first government of President Fernando 
Belaunde Terry (1963-68, 1980-85). 

After a prolonged stalemate over issues ranging from tax and 
agrarian reforms to a contract with the International Petroleum 
Corporation, Belaunde was overthrown on October 3, 1968, by 
the armed forces, led by General Juan Velasco Alvarado (1968-75). 
The resulting "revolutionary government" was a progressive, left- 
wing military regime, which attempted to implement a series of 
structural reforms; it maintained dictatorial powers but was only 
mildly repressive. After an intraregime coup in 1975 and a turn 
to orthodox economic management in the face of rising fiscal deficits 



211 



Peru: A Country Study 



and inflation, as well as increasing levels of social unrest, the mili- 
tary government called for a civilian-run Constituent Assembly to 
draft a new constitution and hold elections. 

The constitution of 1979, signed by the president of the Consti- 
tuent Assembly, Victor Raul Haya de la Torre, on July 12, 1979, 
while he was virtually on his death-bed, sought to restore strong 
presidential power. Largely influenced by the French Fifth Repub- 
lic, the constitution of 1979 established a presidential system with 
a bicameral legislature and a Council of Ministers, which was ap- 
pointed by the president. An excessively broad document, the 1979 
charter covered a host of rights and responsibilities of government, 
private persons, and businesses. It also established the structure 
of government and mandated measures to effect social changes, 
including the eradication of illiteracy and extreme poverty. The 
constitution could be amended by a majority of both houses of 
Congress. 

The constitution guaranteed a series of liberties and rights, in- 
cluding the freedom of expression and association and the right 
to life, physical integrity, and "the unrestricted development of 
one's personality." Although the Roman Catholic Church is enti- 
tled to the cooperation of the government, Catholicism is not the 
official religion of the country, and religion is a matter of personal 
choice. Workers were guaranteed collective bargaining rights and 
had the right to strike and to participate in workplace management 
and profits. Public servants, with the exception of those with 
decision-making power and the armed forces and police, also had 
the right to strike. 

Constitutional guarantees could be suspended during a state of 
emergency, defmed as the disruption of peace or the domestic order, 
a catastrophe, or grave circumstances affecting the life of the na- 
tion. A state of emergency could not last longer than sixty days 
but could be renewed repeatedly. During such a time, the armed 
forces retained control of internal order. Guarantees of freedom 
of movement and of assembly and of freedom from arbitrary or 
unwarranted arrest and seizure were suspended. Constitutional 
guarantees could also be suspended during states of siege, defined 
as an invasion, a civil war, or imminent danger that one of these 
events may occur. At least half of the nation lived under state-of- 
emergency conditions beginning in the second half of the 1980s, 
owing to the increase in insurrectionary activities by the nation's 
two major guerrilla groups. 

The Executive 

The president, who had to be Peruvian and at least thirty-five 
years of age, was elected to a five-year term by direct popular vote, 



212 



Government and Politics 



along with the first and second vice presidents. The president could 
not serve two consecutive terms. 

The constitutional president had a wide range of powers and 
served as chief of state and commander in chief of the armed forces. 
He had the power to appoint members to the Council of Ministers 
and the Supreme Court of Justice, submit and review legislation 
enacted by Congress, rule by decree if so delegated by the Con- 
gress, declare states of siege and emergency, and dissolve the Cham- 
ber of Deputies, if it voted to censure the Council of Ministers three 
times in one term of office. 

In practice, the constitutional president had even more power, 
as he had a remarkable amount of freedom to rule by decree. Her- 
nando de Soto, an adviser to the Fujimori government, stated in 
October 1988 that 95 percent of Peruvian laws were passed by 
presidential decree. Article 211 of the constitution gave the presi- 
dent the authority "to administer public finances, negotiate loans, 
and decree extraordinary measures in the economic and financial 
fields, when the national interest so mandates and with responsi- 
bility to give account to Congress." An extraordinary number of 
measures — 134,000 per five-year mandate, or 100 per working 
day — were passed in this manner in the 1970s and 1980s. In the 
words of De Soto, "Every five years we elect a dictator." 

As no midterm elections for Congress were held, opposition par- 
ties had no means of strengthening their position once the presi- 
dent was elected. Moreover, local and regional governments have 
remained underdeveloped and largely dependent on the central 
government for resources. Thus, power has remained concentrated 
in the central government. As the president could bypass Congress 
with relative ease and rule by decree, power was even more cen- 
tralized in the persona of the chief executive. Without consecutive 
reelection or midterm elections, there was no mechanism by which 
to make the president accountable to the electorate. 

Under the Fujimori government, De Soto was instrumental in 
initiating a reform of this process, the democratization of the sys- 
tem of government, which required laws to be submitted to public 
referendum before they could be passed. A modified version of this 
reform was passed in March 1991. Although this version was not 
expected to have notable effects on the actual process, the debate 
over reform played an important role in heightening public aware- 
ness of the accountability issue. 

The Council of Ministers consisted of a prime minister and the 
specific sectoral ministers, in areas such as economics, education, 
health, and industry. In 1986, during the government of Alan 
Garcia Perez (1985-90), a Ministry of Defense was created, unifying 



213 



Peru: A Country Study 

the three armed forces under the auspices of one ministry. Prior 
to this, the army, navy, and air force each had its own ministry. 
The ministers could be called to appear in Congress for an inter- 
pellation (interpelacion) at any time, as could the entire cabinet (the 
latter no more than three times per term). It is traditional for all 
ministers to resign if the prime minister resigns. 

It has also been traditional for the prime minister to serve con- 
currently as economics minister, although there have been several 
exceptions. After the resignation of a very popular and powerful 
prime minister, Juan Carlos Hurtado Miller, in February 1991, 
President Fujimori separated the posts of prime minister and 
minister of economy, appointing Carlos Torres y Torres Lara and 
Carlos Bolona Behr, respectively, to those positions. The president 
was purportedly uncomfortable with the degree of power that 
Hurtado Miller had and wanted to retain firmer control of the cabi- 
net in general and economic policy in particular. At the same time, 
Fujimori combined the positions of prime minister and minister 
of foreign affairs. In a strong presidential system such as Peru's, 
the position of prime minister, without control of some other func- 
tional ministry, is a relatively impotent one. 

The Legislature 

The legislature had two houses: a Senate composed of 60 mem- 
bers and a Chamber of Deputies composed of 180 members. Mem- 
bers of Congress were elected to five-year terms of office, which 
ran concurrently with those of the president and vice presidents. 
Members of both chambers had to be native Peruvians; senators 
had to be at least thirty-five years of age; deputies, twenty-five. 
There was no prohibition on the reelection of congressional repre- 
sentatives. 

Congress had the power to initiate and pass legislation; inter- 
pret, amend, and repeal existing legislation; draft sanctions for vio- 
lation of legislation; approve treaties; approve the budget and 
general accounts; authorize borrowing; exercise the right of am- 
nesty; and delegate the legislative function to the president. A vote 
of two-thirds of each house was required to pass or amend legisla- 
tion. The constitution mandated a balanced budget. If Congress 
did not come up with a balanced budget by December 15 of each 
year, the president promulgated a budget by executive decree. Con- 
gress convened twice annually, from July 27 to December 15 and 
again from April 1 to May 31. 

Members of Congress were elected according to their position 
on party lists, rather than on the basis of local or regional represen- 
tation, and thus did not have a strong regional or executive base 



214 





Government Palace, Lima 
Courtesy Carol Graham 
Changing of the guard at Government Palace 
Courtesy Karen R. Sagstetter 

215 



Peru: A Country Study 

of support. This is not to say that they had no regional representa- 
tion. Whereas members of the Senate were elected by regions, mem- 
bers of the Chamber of Deputies were distributed in accordance 
with the d'Hondt system of proportional representation, which is 
based primarily on electoral density, with at least one deputy from 
each district. 

Voters cast votes for a particular party, which presented a list 
of candidates in numerical order of preference. Voters were allowed 
to indicate a first-choice candidate, and these votes were tallied as 
"preferential votes," which might determine a candidate's posi- 
tion on the list in future elections, or which region he or she 
represents. According to the percentage of votes per region or 
department, a certain number of seats were allotted in the Con- 
gress for that party. A candidate's position on the party list deter- 
mined whether or not he or she obtained a congressional seat. There 
was, however, no direct regional representation in the central 
government, a situation that would not be changed by the introduc- 
tion of regional governments, as their role was to be strictly lim- 
ited to the regions. 

Congress had the power to censure the Council of Ministers and 
to demand information through interpellation. Yet, this power was 
more a reactive power than anything else. If the Chamber of 
Deputies used its vote of no confidence three times, the president 
could dissolve the body. Although Congress could make life difficult 
for the executive branch through censure, interpellation, or the cre- 
ation of special investigative commissions, these processes occurred 
largely after the fact. 

Particularly with the increase in insurgent violence and the large 
proportion of the country under emergency rule, the power of the 
Congress to pass legislation with an impact on significant sectors 
of the population was increasingly limited. At times, though, after- 
the-fact processes had resulted in the halting or repeal of damag- 
ing legislation. For example, President Garcia' s decree nationalizing 
banks in July 1987 was repealed in late 1990, and President 
Fujimori's Decree Law 171, which legislated that all crimes com- 
mitted by the military in the emergency zones be tried in military 
courts, was repealed in early 1991. In addition, the Congress's spe- 
cial investigative commissions on issues such as human rights and 
judicial corruption, although perhaps unable to have immediate 
impact on policy, have been quite successful at bringing such mat- 
ters to public attention. 

The discretionary power accorded the president was designed 
to avoid the stalemate that occurred prior to 1968, yet it resulted 
in a system that was highly concentrated in the power of the 



216 



Government and Politics 



executive, with little or no public accountability and little signifi- 
cant input on the part of the legislature. Although the Congress 
could hold ministers accountable for their actions, there was little 
it could do, short of impeachment, to affect the operations of the 
president. The president, meanwhile, unconstrained by midterm 
elections or immediate reelection, had little incentive to build a 
lasting base of support in the legislature. 

The Judiciary 

The Supreme Court of Justice was the highest judicial author- 
ity in the nation. The twelve Supreme Court justices were nomi- 
nated by the president and served for life. The nominations had 
to be approved by the Senate. The Supreme Court of Justice was 
also responsible for drawing up the budget for the judiciary, which 
was then submitted to the executive. The budget could be no less 
than 2 percent of the government's expenditures. Under the 
Supreme Court of Justice were the Superior Courts, which were 
seated in the capitals of judicial districts; the Courts of First In- 
stance, which sat in provincial capitals and were divided into civil, 
criminal, and special branches; and the justices of the peace in all 
local centers. 

Several other judicial functions are worthy of note. The public 
prosecutor's office was appointed by the president and was respon- 
sible for overseeing the independence of judges and the adminis- 
tration of justice, representing the community at trials, and 
defending people before the public administration. Public attor- 
neys, who were also appointed by the president, defended the in- 
terests of the state. The office of the Public Ministry was made up 
of the attorney general and attorneys before the Supreme Court 
of Justice, Superior Courts, and the Courts of First Instance. Public 
attorneys defended the rights of citizens in the public interest against 
encroachment by public officials. 

The National Elections Board established voting laws, registered 
parties and their candidates, and supervised elections. It also had 
the power to void elections if the electoral procedures were invalid. 
The six-member board was composed of one person elected by the 
Supreme Court of Justice, one by the Bar of Lima, one by the law 
faculty deans of the national universities, and three by Peru's re- 
gional boards. 

Although in theory the judicial system was independent and 
guaranteed at least minimal operating financial support, in prac- 
tice this was far from the case. The system had been hampered 
by scarce resources, a tradition of executive manipulation, and in- 
adequate protection of officials in the face of threats from insurgents 



217 



Peru: A Country Study 

and drug traffickers. Even without the existence of guerrilla move- 
ments, the system was inadequately staffed to deal with the num- 
ber of cases from criminal violations. It was not uncommon for 
detainees to spend several years in prison awaiting a hearing. In 
addition, in the emergency zones, where guerrillas were operat- 
ing, security forces have had virtual carte blanche in the areas of 
interrogation and detention, and suspects often have been held in- 
communicado. Imprisoned suspects awaiting trial have subsisted 
in medieval conditions. In 1990 the Ministry of Justice recorded 
60 deaths from starvation and a backlog over several years of 50,000 
unheard cases. 

The executive branch traditionally manipulated the judiciary for 
its own purposes, using its ability to appoint and remove certain 
judges for its own political ends. For example, when a Superior 
Court judge ruled that President Garcia's nationalization of Peru's 
banks was unconstitutional, Garcia merely replaced him with a 
judge from his party, the American Popular Revolutionary Alli- 
ance (Alianza Popular Revolucionaria Americana — APRA). The 
newly appointed judge then ruled in Garcia's favor. 

It also was common for known terrorists or drug traffickers to 
be released for "insufficient evidence" by judges, who had no pro- 
tection whatsoever but the responsibility for trying those sus- 
pected of terrorism. Largely because of corruption or inefficiency 
in the system, only 5 percent of those detained for terrorism had 
been sentenced by 1991 . Those responsible for administering justice 
were under threat from all sides of the political spectrum: guer- 
rilla movements, drug traffickers, and military-linked paramilitary 
squads. Notable cases included the murder of the defense attor- 
ney for the SL's number two man, Osman Morote Barrionuevo, 
by an APRA-linked death squad, the Rodrigo Franco Command; 
the self-exile of a public attorney after repeated death threats dur- 
ing his investigation of the military's role in the massacre of at least 
twenty-nine peasants in Cayara, Ayacucho Department, on May 
14, 1988; a bloody letter-bomb explosion at the headquarters of 
the Lima-based Pro-Human Rights Association (Asociacion Pro- 
Derechos Humanos — Aprodeh); and the March 1991 resignation 
of an attorney general of the Military Justice Court, after he received 
death threats for denouncing police aid and abetment of the res- 
cue by the Tupac Amaru Revolutionary Movement (Movimiento 
Revolucionario Tupac Amaru — MRTA) of one of its leaders, 
Maria Lucero Cumpa Miranda. The judicial terrorism was hardly 
surprising, given the lack of protection forjudges dealing with ter- 
rorism cases; many of them normally rode the bus daily to work, 
totally unprotected. Finally, because of neglect of the judicial system 



218 



Government and Politics 



by successive governments, the Supreme Court of Justice lacked 
a significant presence at the national level. 

In the context of widespread terrorism, what was legal in the- 
ory and what happened in practice had little to do with each other. 
As the situation increasingly became one of unrestrained violence, 
the capability of the judicial system to monitor the course of events 
was reduced markedly. In addition, the judicial system was un- 
able to escape the loss of confidence in state institutions in general 
that had occurred among the Peruvian public. The discrediting 
of the judicial system was a significant step toward the total ero- 
sion of constitutional order. 

Public Administration 

Public administration in Peru, already one of the weakest on 
the continent as of 1968, has experienced a dramatic increase in 
the size of state enterprises and the number of civil servants. That 
increase has been accompanied by a gradual decrease in available 
funds to run the administration, partly because of the inefficiency 
of several of the state-sector enterprises. The Petroleum Enterprise 
of Peru (Petroleos del Peru — Petroperu), for example, lost US$700 
million in 1987 alone. Tax collection has been virtually nonexistent, 
with the government having to rely on a tax base of 7 percent of 
gross national product (GNP — see Glossary), a figure comparable 
to Bangladesh's 8.6 percent and Uganda's 8.2 percent. Public ex- 
penditures per person were US$1,100 in 1975; in 1990 they were 
only US$180. 

These trends were exacerbated markedly during the 1985-90 
APRA government of Garcia, as party patronage practices domi- 
nated the administration of the state. The number of state employees 
increased from about 282,400 in 1985 to almost 833,000 in 1990, 
and government resources all but disappeared because of enormous 
fiscal deficits and hyperinflation. State-sector workers were not even 
paid during the last few months of the Garcia government. 

The result was a rise in corruption and inefficiency, leaving Peru 
with one of the most inefficient state sectors in the world. Improve- 
ments in the future were likely to be guided by budgetary con- 
straints, as the resources simply did not exist to maintain the existing 
number of civil servants in the public administration. The short- 
term costs would be a cutback in already scarce public services and 
a possible increase in political protest among displaced civil ser- 
vants. Most Peruvians simply did without the services that even 
a minimal public administration would normally offer, or else they 
found some way of attaining them in the informal sector, usually 
at a much higher price. 



219 



Peru: A Country Study 



Local and Regional Government 

Municipal Governments 

The process of independent municipal government was initiated 
with the first nationwide municipal elections in December 1963. 
This process was halted by twelve years of military rule after 1968, 
but was reinitiated with the November 1980 municipal elections 
(see table 19, Appendix). Each municipality has been run autono- 
mously by a municipal council (consejo municipal), a provincial coun- 
cil (consejo provincial), and a district council (consejo distrital), all of 
whose members were directly elected. Municipalities had jurisdic- 
tion over their internal organization and they administered their 
assets and income, taxes, transportation, local public services, urban 
development, and education systems. 

Yet, the autonomy of municipalities may have been reduced by 
their financial dependence on the central government. Their funds 
have come primarily from property taxes, licenses and patents re- 
quired for professional services, market fees, vehicle taxes, tolls from 
bridges and roads, fines, and donations from urban migrant clubs. 
In the majority of municipalities, where the bulk of the inhabitants 
are poor, those with legal title to a home are in the minority; few 
people even own their own vehicles; roads are not paved; and there 
is a dramatic shortage of basic services, such as water and electric- 
ity. Most municipalities can hardly generate the revenue to cover 
operating costs, much less to provide desperately needed services. 
Thus, a degree of dependence on the central government for 
resources may limit somewhat the potential for autonomous initia- 
tive. Although this situation is hardly unique in Latin America, 
the shortage of resources in Peru is particularly extreme. 

The municipal process has also come under substantial threat 
from the SL. An important component of its strategy was to 
sabotage the 1989 municipal and presidential elections. The group 
launched a ruthless campaign in which elected officials or candi- 
dates for electoral offices were targeted. During the 1985-89 pe- 
riod, the SL assassinated forty-five mayors. In a campaign of 
violence prior to the 1989 elections, it killed over 120 elected offi- 
cials or municipal candidates, resulting in the resignation or with- 
drawal of 500 other candidates. In December 1988, dozens of 
Andean mayors resigned, citing lack of protection from terrorist 
threats; many rural towns were left with no authorities whatsoever. 
Voters were also threatened with having their index fingers chopped 
off by the SL. The threats were most effective in the more remote 
regions, such as Ayacucho, where null and blank voting in the 1990 
elections was the highest in the country. 



220 



Government and Politics 



Regional Governments 

The constitution of 1979 mandated the establishment of regional 
governments in Peru. Regionalization was part of the original 
APRA program of the 1920s. In 1988 the APRA government fi- 
nally initiated the process with a law providing for the creation, 
administration, and modification of regions, which would replace 
the former departments. Between 1987 and 1990, the APRA gov- 
ernment also issued corresponding laws creating eleven of the twelve 
regions called for under law, with the Lima/Callao region remaining 
under negotiation (see fig. 13). In 1991 debates in Congress con- 
tinued on the Lima/Callao and San Martin regions, with the lat- 
ter voting to separate from La Libertad Department. The highly 
politicized debates centered on whether senators should be elected 
by region or by national district, and on the method by which 
regional assemblies are elected. Five of the regions held their first 
elections for regional assemblies on November 12, 1989, in con- 
junction with the municipal elections, and the other six regions held 
elections in conjunction with the April presidential elections. 

By law each regional assembly consisted of provincial mayors 
(30 percent); directly elected representatives (40 percent); and 
delegates from institutions representative of the social, economic, 
and cultural activities of the region (30 percent). In 1990 APRA 
and the United Left (Izquierda Unida — IU) dominated the regions, 
with APRA controlling six, IU three, and the Democratic Front 
(Frente Democratico — Fredemo) only one. 

The process of regionalization was more one of administrative 
shuffling than of substance. However, the regional governments 
faced the same resource constraints that substantially limited the 
ability of municipal governments to implement independent ac- 
tivities. The central government is in theory supposed to transfer 
funds and assets, such as state-sector enterprises, to the regions, 
but in practice this has only happened piecemeal. This tendency 
had been exacerbated by the severity of the economic crisis and 
the poor fiscal situation inherited by the Fujimori government. The 
dynamic was made more conflictive because the regional gov- 
ernments were controlled by parties in opposition to the central 
government. The cutting of resources allocated to regional govern- 
ments in the 1991 budget was a good indication of the constraints 
that regional governments would face for the foreseeable future. 
Moreover, the executive had taken back some powers that were origi- 
nally given to the regions, such as control over the national tourist 
hotels. The regional governments, meanwhile, had heightened the 
debate with actions such as the refusal to pay the executive what 
was owed for electricity tariffs. 



221 



Peru: A Country Study 



The Electoral System 

Suffrage was free, equal, secret, and obligatory for all those be- 
tween the ages of eighteen and seventy. The right to participate 
in politics could be taken away only when one was sentenced to 
prison or given a sentence that stripped a person of his or her po- 
litical rights. No political party was given preference by the govern- 
ment, and free access to the government-owned mass media was 
given in proportion to the percentage of that party's results in the 
previous election. The National Elections Board, which was au- 
tonomous, was responsible for electoral processes at the national 
and local levels. 

National elections for the presidency and the Congress were held 
every five years. If no one presidential candidate received an ab- 
solute majority, the first- and second-place candidates were in a 
runoff election. The president could not be reelected for a consecu- 
tive term, but deputies and senators could be. 

Direct municipal elections were held every three years. Regional 
governments were elected every five years. Elections of regional 
governments were held in conjunction with either the December 
1989 municipal or April 1990 national elections. 

In the late 1980s and early 1990s, the electoral process came under 
substantial threat from the SL, which made the sabotaging of elec- 
tions an explicit goal. Despite terrorist threats in the 1990 presi- 
dential elections, voter turnout was higher than in 1985, with the 
exception of some emergency zones in the southern Sierra, where 
the abstention rate was as high as 40 percent. Null and blank vot- 
ing was about 14.5 percent of the total in the first round in 1990 
and 9.5 percent in the second (see table 20; table 21, Appendix). 

The threat from the SL was such that in some remote rural towns 
there were no local officials at all because potential candidates were 
not willing to jeopardize their lives in order to run for office. Al- 
though there was no doubt that the SL failed to jeopardize the 1990 
elections, it managed to pose a significant threat to the process, 
particularly in remote rural areas. Given the severity and brutal- 
ity of the SL's threat, it was actually a credit to the Peruvian elec- 
toral process that elections were held regularly and with such high 
voter-turnout ratios, although fines for not voting were also a factor. 

Political Dynamics 

Political Parties 

Until April 5, 1992, Peru had had a multiparty system and 
numerous political parties, some of which had been in existence 
for several decades. Yet, in 1990 the Peruvian electorate by and 



222 




•16 



International bounda 

Region boundary 

® National capital 

® Region capital 

^ Disputed area 



Note--Administrative boundaries and nam 
had not been finalized in 1991 and 
were subject to change. 



^ 100 200 Kilometers 



100 200 Miles 



Source: Based on information from Instil 
1989; and Car etas, March 4, 1 

Figure 13. Proposed Administra 



224 



Government and Politics 



large rejected established parties and voted for a virtual unknown 
from outside the traditional party system. Alberto Fujimori's rapid 
and sudden rise to power and the resulting government that lacked 
a political party base signified a crisis for Peru's party system, and 
a crisis of representation more generally. These crises resulted from 
the severity of the socioeconomic situation and also from the poor 
performance of several of the traditional parties in government. 

American Popular Revolutionary Alliance 

APRA, Peru's oldest and only well-institutionalized party, was 
founded by Victor Raul Haya de la Torre in Mexico City in May 
1924. The APRA program espoused an anti-imperialist, Marxist- 
oriented but uniquely Latin American-based solution to Peru's and 
Latin America's problems. APRA influenced several political move- 
ments throughout Latin America, including Bolivia's Nationalist 
Revolutionary Movement (Movimiento Nacionalista Revolucio- 
nario — MNR) and Costa Rica's National Liberation Party (Partido 
Liberation Nacional — PLN). Years of repression and clandestinity, 
as well as single-handed dominance of the party by Haya de la 
Torre, resulted in sectarian and hierarchical traits that were analo- 
gous to some communist parties. In addition, opportunistic ideo- 
logical swings to the right by Haya de la Torre in the 1950s, in 
exchange for attaining legal status for the party, resulted in an ex- 
odus of some of APRA's most talented young leaders to the Marxist 
left. These shifts created cleavages between APRA and the rest of 
society and were significant obstacles to democratic consensus- 
building during APRA's 1985-90 tenure in government. 

In any case, the party maintained a devoted core of followers 
that remained permanent party loyalists. In May 1989, APRA 
chose as its standard bearer Luis Alva Castro, a long-time rival 
to President Garcia. APRA was as much a social phenomenon as 
a political movement, with a significant sector of society among 
its membership whose loyalty to the party and its legacy was un- 
wavering. Despite APRA's disastrous tenure in power, in the first 
round of the 1990 elections it obtained 19.6 percent of the vote, 
more than any other of the traditional parties. 

Popular Action 

Fernando Belaunde Terry founded Popular Action (Action 
Popular — AP) in 1956 as a reformist alternative to the status quo 
conservative forces and the controversial APRA party. Although 
Belaunde 's message was not all that different from APRA's, his 
tactics were more inclusive and less confrontational. He was able 
to appeal to some of the same political base as APRA, primarily 



225 



Peru: A Country Study 

the middle class, but also to a wider base of professionals and white- 
collar workers. The AP had significant electoral success, attaining 
the presidency in 1963 and 1980, but the party was more of an 
electoral machine for the persona of Belaunde than an institution- 
alized organization. In addition, whereas in the 1960s the AP was 
seen as a reformist party, by the 1980s — as Peru's political spec- 
trum had shifted substantially to the left — the AP was positioned 
on the center- right. With the debacle of the second Belaunde govern- 
ment, the AP fared disastrously in 1985, attaining only 6.4 per- 
cent of the vote. In 1990 the AP participated in the elections as 
a part of the conservative coalition behind Mario Vargas Llosa and 
suffered, as did all political parties, an electoral rejection. 

The Christian Democrats 

The Christian Democratic Party (Partido Democrata Cristiano — 
PDC) was a relatively small, center-right party influenced by Chris- 
tian Democratic thought. Slightly more conservative than the AP, 
the PDC, which was founded in 1956, also was perceived to be 
more to the right as Peru's spectrum shifted left. The PDC on its 
own was not able to garner an electoral representation of over 10 
percent after 1980. A splinter group, the Popular Christian Party 
(Partido Popular Cristiano — PPC), was founded by Luis Bedoya 
Reyes (the mayor of Lima from 1963 to 1966) in 1966. 

The Democratic Front 

The AP and the PPC together provided the organizational basis 
for Mario Vargas Llosa and his independent Liberty Movement 
(Movimiento de Libertad). Vargas Llosa, who entered politics to 
protest Garcia's nationalization of Peru's banks in 1987, started 
out as an independent, backed by the Liberty Movement. In late 
1988, however, Vargas Llosa made a formal alliance, known as 
Fredemo, with the AP and the PPC because he felt such an alli- 
ance would provide him with a necessary party organizational 
base. By doing so, he alienated several members of his own coali- 
tion, including one of his primary backers, Hernando de Soto, who 
felt that Vargas Llosa was allying with the "traditional" right. Anal- 
ysis of the electoral results indicated that the majority of voters were 
also reluctant to support Peru's traditional, conservative politicians. 
The Fredemo campaign spent inordinate amounts of money on 
advertising — US$12 million, versus US$2 million spent by the next 
highest spender, APRA. The free spending, in conjunction with 
the use in television campaign advertisements featuring white, 
foreign-born singers, revealed how these parties continued to 



226 



Government and Politics 



represent the interests of the nation's elite, who were of European 
ancestry, and how out of touch they were with the nation's poor, 
who were of indigenous heritage (see Culture, Class, and Hier- 
archy in Society, ch. 2). 

The Left 

The 1990 results also demonstrated that the population was un- 
willing to vote for the nation's hopelessly divided left. Split into 
Leninist, Maoist, Marxist, Trotsky ite, and Socialist camps, the left 
in Peru had been severely fragmented since its origins. It had its 
first experience as a legally recognized electoral force in the 1978-80 
Constituent Assembly, in which the left made up approximately 
one-third of the delegates. Despite its relative strength at the grass- 
roots level, the left was unable to unite behind one political front 
in the 1980 elections, and it contested the elections as nine separate 
political factions. Such splintering limited its potential in those elec- 
tions and played into the hands of Belaunde. The left together at- 
tained a total of 16.7 percent of the vote; APR A, divided and 
leaderless after the death of Haya de la Torre, garnered 27.4 per- 
cent; Belaunde won 45.4 percent. 

Shortly after the 1981 elections, the majority of the factions of 
the Socialist, Marxist, and Maoist left (with the obvious exception 
of the SL, which had gone underground in the early 1970s), formed 
the IU coalition. By 1986, under the leadership of Alfonso Bar- 
rantes Lingan, the IU was strong enough to take the municipality 
of Lima, as well as to become the major opposition force to the 
APRA government. Barrantes had been the runner-up in the 1985 
national elections, winning 22.2 percent of the vote. 

Yet, there were irreparable divisions from the outset between 
the moderate Barrantes faction, which remained committed, first 
to democracy, and the more militant factions, which were sym- 
pathetic to, if not overtly supportive of, "armed struggle" as a 
potential route. The existence of two active guerrilla movements 
made this a debate of overriding importance. Although much of 
the militant left condemned the brutal tactics of the SL, they re- 
mained sympathetic with and indeed often had ties to the more 
"conventional" tactics of the MRTA. 

The breach came to a head in 1989, when Barrantes, the most 
popular politician the left had in its ranks, and the bulk of the 
moderates split off and formed the Leftist Socialist Accord (Acuerdo 
Socialista Izquierdista — ASI). The larger and best-organized par- 
ties, including the radical Mariateguist Unified Party (Partido 
Unificado Mariateguista — PUM) and the Peruvian Communist 
Party (Partido Comunista Peruano — PCP), remained in the IU. 



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Peru: A Country Study 

A divided left quarrelling over ideological differences hardly seemed 
the solution to Peru's quagmire in 1990. In the 1990 elections, the 
left had its poorest showing since the formation of the IU, with 
the ASI and IU together garnering less than 12 percent of the vote. 

Cambio '90 

Cambio '90 only entered the Peruvian political spectrum in early 
1990, but by June 1991 it was the most powerful political force 
in the nation. Cambio's success hinged largely on the success of 
its candidate for the presidency, Alberto Fujimori, an agricultural 
engineer and rector of the National Agrarian University (Univer- 
sidad Nacional Agraria — UNA) in Lima's La Molina District from 
1984 to 1989. Fujimori's appeal to a large extent was his standing 
as a political outsider. 

At the same time, Cambio's success was also attributed largely 
to its eclectic political base and its active grassroots campaign. Cam- 
bio's two main bases of support were the Peruvian Association of 
Small- and Medium-Sized Businesses (Asociacion Peruana de 
Empresas Medias y Pequefias — Apemipe) and the informal sector 
workers who associated their cause with Apemipe, and the evan- 
gelical movement. Less than 4 percent of the Peruvian population 
was Protestant. The Evangelicals were extremely active at the grass- 
roots level, particularly in areas where traditional parties were weak, 
such as the urban shanty towns and rural areas in the Sierra. 
Although Cambio began activities only in January 1990, by the 
time of the elections it had 200,000 members in its ranks. 

However, Cambio's success at the polls did not translate into 
a lasting party machinery. Cambio was much more of a front than 
a political party, and its ability to hold together was called into ques- 
tion within a few weeks after attaining power. Cambio's two bases 
of support had little in common with each other except opposition 
to Vargas Llosa. Their links to Fujimori were quite recent and were 
ruptured to a large extent when Fujimori opted, out of necessity, 
for an orthodox economic shock program. Less than six months 
into his government, Fujimori broke with many of his Cambio sup- 
porters, including the second vice president and leader of the Evan- 
gelical Movement, Carlos Garcia y Garcia, and Apemipe. The latter 
became disenchanted with Fujimori because small businesses were 
threatened by the dramatic price rises and opening to foreign com- 
petition that the "Fujishock" program entailed. 

Nonparty Organizations 

The rapid rise of Cambio reflected a more far-reaching phenome- 
non in Peru: the growth of extrasystem democratic political activity. 



228 



Government and Politics 



In conjunction with the rise in economic importance of the infor- 
mal sector was a rise in activity and importance of a host of "in- 
formal" political groups: neighborhood organizations, communal 
kitchens, popular economic organizations, and nongovernmental 
organizations. Although originating largely outside the realm of 
traditional parties and politics, these groups became critical actors 
in local-level democratic politics. Usually autonomous and demo- 
cratic in origin and structure, they were often wary of political par- 
ties, which attempted to co-opt them, or at least to elicit their support 
for wider-reaching political goals. These organizations were primar- 
ily concerned with daily survival issues, such as obtaining basic 
services like water and electricity. They tended to support politi- 
cal parties as a convenient way to attain their goals, but just as 
easily withdrew that support when it did not provide tangible ends. 
They had a tendency, but by no means a constant one, to vote 
for parties of the left. This fact could be explained in part by the 
Peruvian left's approach to grassroots movements, which was 
usually — but not always — less sectarian and hierarchical than that 
of traditional parties, such as APR A. 

Thus, the relations that informal groups had with political par- 
ties were by no means simple or clear-cut. As the varied results 
from the 1980-90 elections demonstrate, the urban poor had a ten- 
dency, which was not without shifts, to vote for the left. They had 
few binding ties to political parties and were quite willing to vote 
for nonparty actors, from Manuel A. Odna (president, 1948-50, 
1950-56) in the 1950s to Ricardo Belmont Cassinelli (as mayor 
of Lima in 1989) and Fujimori in 1990. Because the urban poor's 
need for basic services was so grave, their vote was most often de- 
termined by the most credible promise for basic-service delivery. 
Broader political goals of the parties were only a concern once basic 
needs had been met. Still, the gap between these groups and par- 
ties was significant. Parties play a role in virtually all consolidated 
democracies, and the difficulties of governing a fragmented soci- 
ety and polity such as Peru's became increasingly evident as the 
Fujimori government was forced to implement unpopular economic 
policies in the absence of an organized political base. 

Electoral defeats usually trigger internal party changes and 
democratization. In 1990 all Peruvian parties faced electoral 
losses. The parties were well aware of the need to reform in order 
to remain politically viable entities. In early 1991, the Christian 
Democrats, for example, launched a process of internal party reform 
and an evaluation of their relations with groups where their sup- 
port base was weak, such as the shanty towns. The left underwent 
a process of ideological and strategic reflection at approximately 



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Peru: A Country Study 

the same time. Most of the other political parties likely would have 
followed suit. To the extent that parties failed to reform to adapt 
to new political realities and to the needs and strategies of the 
plethora of grassroots groups and local organizations in Peru, a 
crisis of representation in Peruvian democracy, if and when it was 
restored, appeared more likely for the foreseeable future, threatening 
its viability. 

Interest Groups 
The Military 

The military in Peru has traditionally played an influential role 
in the nation's politics, whether directly or indirectly. Prior to the 
1968 revolution, the military was seen as caretaker of the interests 
of conservative elites, and its involvement in politics usually en- 
tailed the repression of "radical" alternatives, particularly APRA. 
An APRA uprising and brutal military retaliation in Trujillo in 
1932 initiated a long period of violence and strained relations be- 
tween the two. As late as 1962, when General Ricardo Perez Godoy 
led a military coup to prevent Haya de la Torre from becoming 
president, the military was willing to resort to extraconstitutional 
means to prevent APRA from coming to power. 

By 1962, however, it was evident that the military was no longer 
solely the preserver of elite interests, and that it was increasingly 
influenced by a new military school of thought, the National Secu- 
rity Doctrine, which posited that development and social reform 
were integral to national security. The Advanced Military Studies 
Center (Centro de Altos Estudios Militares — CAEM) in Lima was 
a proponent of this philosophy in the 1950s and 1960s. In addi- 
tion, the Peruvian military's involvement in fighting guerrilla up- 
risings in the southern Sierra in the mid-1960s gave many officers 
a first exposure to the destitute conditions of the rural poor and 
to the potential unrest that those conditions could breed. 

Thus, the military's 1968 intervention was far from a typical 
military coup. Rather, it was a military-led attempt at implementing 
far-reaching economic and social reforms, such as the Agrarian Re- 
form Law of 1969 and the Industrial Community Law of 1970. 
The military's lack of understanding of civil society, demonstrated 
by its authoritarian attempts to control popular participation 
through a government- sponsored social mobilization agency, the 
National System for Supporting Social Mobilization (Sistema 
Nacional de Apoyo a la Mobilizacion Social — Sinamos), was 
largely responsible for the failure of its reforms. When the mili- 
tary left power in 1980, it left a legacy of economic mismanagement, 



230 



Government and Politics 



incomplete reforms, and a society more radicalized and politicized 
than when it had taken over. 

Yet, the military's revolutionary experiment changed the im- 
age of the institution, as well as its own views about the benefits 
of direct government control. It was, at least for the foreseeable 
future, immune from direct intervention in politics. It was no longer 
seen, however, and no longer perceived itself, as a monolithic con- 
servative institution, but rather as the institution that had attempted 
to do what no political force had been able to do: radically trans- 
form the nation's economy and society. Its failure may have 
strengthened the voice of conservatives within its ranks, but it re- 
tained the awareness that social reform and economic development 
were critical to Peru's social stability and ultimately its national 
security. And as keeper of national security, it, more than any other 
force in the nation, was constantly reminded of this by the presence 
of the SL and other insurgent groups. 

The large proportion of the country under state-of-emergency 
rule, coupled with the military's desire to fight against the SL un- 
constrained by civilian control, had understandably created ten- 
sions between successive civilian governments and the military. As 
in the case of several other transitions to democracy in Latin Amer- 
ica, the Peruvian military took precautions to protect its institu- 
tional viability and to increase its strength vis-a-vis civilian 
government. From the outset, the Belaunde government was forced 
to accept certain conditions set by the military pertaining to budget- 
ary autonomy and states of emergency. Nineteen days before the 
surrender of power to the Belaunde administration, the military 
passed the Mobilization Law, with minimum publicity in order 
to avoid civilian reaction. The law enabled the military to expropri- 
ate or requisition companies, services, labor, and materials from 
all Peruvians or foreigners in the country at times of national emer- 
gency. These times included cases of "internal subversion and in- 
ternal disasters." In addition, because the Belaunde government 
had failed to take the SL seriously until it was too late, the govern- 
ment defaulted to the military in the design and implementation 
of a counterinsurgency strategy. 

The Garcia government began with a different approach. Garcia 
fired three top generals responsible for civilian massacres in the 
emergency zones, and in a blow to traditional budgetary auton- 
omy halved an air force order for French Mirage jets. However, 
Garcia' s image suffered a major blow after he personally gave orders 
for the military to do whatever was necessary to put down a revolt 
of the SL inmates in Lima's prisons in June 1986, resulting in the 
massacre of 300 prisoners, most of whom had already surrendered. 



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Peru: A Country Study 

As the government lost coherence and as economic crisis and po- 
litical stalemate set in, pressure on the military subsided, and its 
de facto control over the counterinsurgency campaign increased. 

Because the Fujimori government had no organized institutional 
base, it was in a difficult position vis-a-vis the military. Although 
the military had no desire to take direct control of the government, 
it indicated the one scenario that would force it to intervene — if 
no one were running the state. Even at the height of the APRA 
government's crisis, when President Garcia was in virtual hiding 
in the government palace, the military could rely on APRA to run 
the state. If a similar loss of control by President Fujimori occurred, 
there would be no such institution with a stake in running the state, 
a scenario that might force the military to act. Fujimori had clearly 
made a point of building strong support in one sector of the army 
and in return seemed to be backing increased independence for 
the military in the counterinsurgency war. 

A good example of the military's independence was the passage 
of Decree Law 171, which stipulated that military personnel in 
emergency zones were on active duty full-time and therefore could 
be tried only in military courts, which try only for neglect of duty 
and not for offenses, such as murder or torture. In addition, the 
government exacerbated tensions with some sectors of the military 
in September 1990 by refusing to sign a US$93 -million aid agree- 
ment with the United States that included US$36 million in mili- 
tary aid. The Fujimori government felt the accord's coca eradication 
policy did not sufficiently take economic development into account. 
Some within the armed forces, which in general were desperately 
short of funds, felt that the government should take what it could 
get. In May 1991, Fujimori conceded to both United States and 
Peruvian military pressure and signed the accord. 

In short, the situation under Fujimori was one of de facto mili- 
tary control, not just of the emergency zones, but of the areas of 
government that the military perceived to be its domain. Demon- 
strative of the military's increasing influence over certain areas of 
government was the fact that the Ministry of Defense and the Minis- 
try of Interior were both headed by generals. 

The Church 

Although Peru does not have an official religion, the Roman 
Catholic Church — to which over 90 percent of Peruvians belonged — 
is recognized in the constitution as deserving of government cooper- 
ation. Traditionally, the Roman Catholic Church has monopolized 
religion in the public domain. 



232 



Government and Politics 



In the Peruvian Catholic Church hierarchy, staunch conserva- 
tives, such as Archbishop Juan Landazuri Ricketts, wielded a great 
deal of influence. Six of the total eighteen bishops, including 
Landazuri, belonged to the ultraconservative Opus Dei movement. 
At the same time, the founder of liberation theology (see Glossary), 
Gustavo Gutierrez, was a member of the official church in Peru, 
and liberation theology had a strong presence at the grassroots level. 
Unlike Brazil, where the official church could be described as liberal 
and critical of the more conservative Vatican, or Colombia, where 
the church was a loyal follower of the Vatican's policies, in the Peru- 
vian Church hierarchy both trends coexisted, or at least competed 
for influence. Conservatives followed the dictates of Pope John Paul 
II, a strong proponent of theological orthodoxy and vertical con- 
trol of the church. This view contrasted sharply with the progres- 
sives in the Latin American church, who espoused the mandate 
of Vatican II, which exhorted the clergy to become actively involved 
in humanity's struggle for peace and justice, and to help the poor 
to help themselves rather than accept their fate. 

At the grassroots level, the church was extremely active at or- 
ganizing neighborhood organizations and self-help groups, such 
as communal kitchens and mothers' clubs (see Catholicism and 
Community, ch. 2). Church activities at this level had little to do 
with theoretical debates at higher levels, although they tended to 
emanate from the more progressive sectors within. Church-related 
organizations, such as Caritas (Catholic Relief Services), were ac- 
tive in providing local efforts with donations of food and funds from 
abroad. Indeed, Caritas had a nationwide network of coverage su- 
perior to or at least rivaling that of any state ministry or institution. 

In addition to Caritas, the other major nongovernmental or- 
ganizer of communal kitchens and mothers' clubs in Lima was the 
Seventh-Day Adventist Church, which reflected the increasing im- 
portance of the Evangelical Movement. Although only about 4.5 
percent of Peru's population was Protestant, the Evangelical Move- 
ment was extremely active at the grassroots level and, as afore- 
mentioned, was critical to the victory of Fujimori and Cambio '90 
in poor areas. The Catholic Church hierarchy felt sufficiently threat- 
ened by the Evangelicals' support for Fujimori that it unofficially 
backed Vargas Llosa, an agnostic, against Fujimori, a Catholic. 

The church, to the extent that it was an organizer of the poor, 
had increasingly come into conflict with the SL. Initially, the SL 
paid little attention to the clergy. In Ayacucho, for example, where 
the traditionally oriented church hierarchy had little involvement 
with social issues, the church was of little relevance to the SL. 
However, in the late 1980s, the SL's strategy shifted, and the group 



233 



Peru: A Country Study 



became more concerned with the church's organizational poten- 
tial. The SL had a more difficult challenge in organizing support, 
particularly in areas where the church had been active in encourag- 
ing close community bonds, such as parts of Cajamarca and Puno. 
In such areas, as in the shantytowns surrounding Lima, clergy had 
increasingly become targets of SL assassinations as well. 

In the face of the weakening of other state institutions, the 
church's role, at least at the grassroots level, had increased in im- 
portance (see Community Life and Institutions, ch. 2). Caritas was 
the primary mobilizer of food donations and aid during the most 
critical stage of the Fujimori government's shock stabilization plan. 
Although the government promised its own social emergency pro- 
grams, none materialized, and the church surfaced as the primary 
vehicle for channeling aid to the poor. This activity increased the 
visibility of the clergy as a target of SL attacks and posed difficult 
choices for members of the clergy who continued to operate in the 
regions where the SL had a strong presence — the majority of the 
areas where most of the poor of Peru resided. 

Economic Associations 

The major economic associations in Peru were the National In- 
dustries Association (Sociedad Nacional de Industrias — SNI), the 
National Confederation of Private Business (Confederacion Na- 
cional de Instituciones Empresariales Privadas — Confiep), and the 
Apemipe (Peruvian Association of Small and Medium-Sized Busi- 
nesses). Traditionally, such organizations had played a minimal 
role in politics. In the 1980s, however, they became actively in- 
volved in the nation's politics. 

Garcia' s national understanding (concertacion) strategy called for 
cooperation between government and business in economic policy- 
making. Nevertheless, Garcia bypassed organized business sectors, 
the foremost among them being Confiep, and dealt instead directly 
with the twelve most powerful businesspeople in the country, the 
so-called twelve apostles. Thus, when Garcia threatened the en- 
tire private sector with his surprise nationalization of the nation's 
banks, Confiep became one of the most active supporters of the 
bankers protesting Garcia' s move, and subsequently of Vargas 
Llosa's Liberty Movement. Meanwhile, two former presidents of 
Confiep — now senators Francisco Pardo Mesones of Somos Libres 
(We Are Free) and Ricardo Vega Llona of Fredemo — launched 
independent candidacies in the 1990 elections. 

Ironically, Apemipe became politically active in opposition to 
Vargas Llosa and his proposed policies, which threatened the 
viability of many small-businesspeople. The former president of 



234 




Reed homes erected by squatters in Lima's Pamplona Alta area 
Children in the shantytown of Hudscar, Lima 
Courtesy Carol Graham 



235 



Peru: A Country Study 

Apemipe, Maximo San Roman, ran as first vice president for Cam- 
bio and became president of the Senate. 

Organized business, per se, has never been particularly influential 
in Peru. Instead, strong influence has been wielded by foreign com- 
panies, such as the International Petroleum Corporation (IPC), 
or by families, such as the Romeros and the Wieses, who had sub- 
stantial holdings across a variety of industries. Yet with the eco- 
nomic situation in May 1991 and the substantial reduction of foreign 
investment, the domestic private sector had increased in its rela- 
tive economic importance. Thus, the sector's tendency to use its 
organizations to influence political trends was likely to continue 
for the foreseeable future. 

Labor Unions 

The labor movement in Peru has traditionally been weak, and 
its fate, until 1968, was inextricably linked to APR A. Very much 
affected by the enclave or anti-union enterprises and by the rural 
or community background of many of its members, labor was un- 
able to articulate a coherent set of class interests. APRA, with its 
organizational capacity and popular following, was perhaps the only 
existing mobilization vehicle for organized labor. APRA dominated 
the Confederation of Peruvian Workers (Confederacion de Trabaja- 
dores del Peru — CTP), which it founded in 1944 and which was 
officially recognized in 1964. The major labor dispute was tradi- 
tionally between the CTP and APRA, and there was a direct corre- 
lation between union activity and the legal status of APRA, which 
was usually banned by military governments. APRA was more con- 
cerned with using the labor movement for its own ends than with 
enhancing the objectives of organized labor. APRA curtailed strike 
activity, for example, during its years of collaboration with the 
government of Manuel Prado y Ugarteche (1939-45, 1956-62). 

Union activity increased dramatically during the military years 
with the introduction of a new labor code and the Industrial Re- 
form Law, culminating in the union-led general strikes of 1977 and 
1978. Yet, the labor and industries laws, which made it more 
difficult to dismiss a worker in Peru than in any industrialized na- 
tion, acted as a major disincentive to formal-sector employment. 
These laws, coupled with the dramatic economic decline of the 
1980s, led to a substantial decrease in the relative power of labor 
unions by 1990. 

After 1968 the communist labor movement, the General Con- 
federation of Peruvian Workers (Confederacion General de 
Trabaj adores del Peru — CGTP) was legalized and began to erode 
APRA's monopoly on union support, owing in part to the party's 



236 



Government and Politics 



relinquishing its radical stance. The Federation of Workers of the 
Peruvian Revolution (Central de Trabaj adores de la Revolucion 
Peruana — CTRP), which was set up by the military as an attempt 
to control the workers' movement, never really got off the ground, 
particularly in the face of the powerful CGTP. In 1991 the CGTP 
remained the most important union confederation in Peru. 

The traits that were held typical of APRA union supporters — 
marginal, socially ambitious, and socially frustrated — began to 
characterize the Maoist left and its affiliated unions under the CGTP 
umbrella in the 1970s. These groups, such as the powerful teachers' 
union, the Trade Union of Education Workers of Peru (Sindicato 
Unico de Trabaj adores de la Ensenanza del Peru — SUTEP), and 
the miners' confederation, the National Federation of Syndicated 
Mining and Metallurgical Workers of Peru (Federation Nacional 
de Trabajadores Mineros y Metalurgicos Sindicalistas del Peru — 
FNTMMSP), were key actors in the general strikes that virtually 
brought down the military regime in the late 1970s. In addition, 
the expansion of state industries, each of which had its own affiliated 
union, substantially increased the number of organized workers. 

By the early 1980s, economic decline began to erode the power 
of unions, as did the neoliberal strategy adhered to by the Belaunde 
government. The APRA government completely bypassed or- 
ganized labor, as it did organized industry in its concertacion stra- 
tegy. Garcia' s populist tactics left little room for organized labor. 
Although there was a high number of strikes by state-sector work- 
ers during the Garcia government, particularly during the last two 
''crisis" years, the strikes were generally more defensive, in the 
face of economic decline, than political. Most of the general strikes 
that were called during the Garcia government were largely a 
failure, attaining only minimal support. 

One reason that organized labor was less able to pursue politi- 
cal goals was the SL, which launched several "armed strikes" in 
various cities throughout the Garcia years. Although these strikes 
had varying degrees of success, they rarely had union support be- 
cause supporting the strikes meant supporting the SL. Increasingly, 
street protest for political purposes signified support for armed in- 
surrection, which the majority of unions rejected. Indeed, there 
were even violent clashes between the SL and the CGTP during 
one general strike. 

The SL had its own affiliated union, the Class Movement of 
Workers and Laborers (Movimiento de Obreros y Trabajadores 
Clasistas — MOTC), which operated primarily in the industries 
along Lima's Central Highway (Trans- Andean Highway), the in- 
dustrial belt of the city. Of the four major companies along this 



237 



Peru: A Country Study 

highway, the MOTC had made substantial inroads in three. The 
MOTC did not necessarily control unions, but was tenacious in 
its support of strikes and was able to establish a strong presence 
in these industries. Yet, it also created rifts in the labor movement 
in general because many workers did not necessarily want to be 
affiliated with the SL. Indicative of the extent of conflict was the 
SL's killing of fifty-one union leaders, primarily mineworkers, be- 
tween January and May 1989, and its assassination of a promi- 
nent textile leader in October 1989. 

The one labor sector that was able to exert substantial pressure 
during the APRA government was the miners' federation, the 
FNTMMSP, which in 1989 staged a strike involving 90,000 miners 
and costing the government hundreds of millions of dollars in lost 
export earnings. Meanwhile, the federation was also targeted by 
the SL. Although able to infiltrate the union to some extent, stag- 
ing armed strikes and attacking mining facilities, the SL was by 
no means able to gain control of it. Nevertheless, the SL's presence 
caused violence from both the left (there were clashes between the 
SL and nonsympathetic miners) and the right (the leader of the 
miners' federation was assassinated by the APRA-and military- 
linked paramilitary squad, the Rodrigo Franco Command). Some 
critics felt that the government and the National Mining and 
Petroleum Company (Sociedad Nacional de Mineria y Petroleo — 
SNMP) found the SL infiltration of the mines a convenient ex- 
cuse for declaring a state of emergency in the region. 

Only 15 to 20 percent of the labor force was unionized in 1990, 
making that force a rather privileged sector of the working class. 
Underemployment was as high as 75 percent; and only 9 percent 
of Lima's economically active population was fully employed. 

The prospects for the union movement in Peru in the early 1990s 
were dismal at best. On the one hand, the economic crisis made 
access to a job a luxury. Protest by organized labor was a last at- 
tempt at protecting salary levels that had deteriorated by over 50 
percent in the 1985-90 period. On the other, the SL's drive to es- 
tablish influence among organized labor presented a challenge to 
all the unions that wished to retain their independence. 

In the event of an economic recovery and the adoption of a more 
realistic labor code that did not make access to a job a privilege 
for a small minority, organized labor might be able to enhance its 
status as the protector of workers rights rather than the proponent 
of political radicalism. Still, these developments also hinged on the 
defeat of the foremost proponent of radicalism, the SL — an un- 
likely scenario in the short term. 



238 



Government and Politics 



Students 

Like the labor unions, the student movement has seen its rise 
and fall in Peru, and its fate was also inextricably linked to that 
of the SL. Compared with Peru's other social welfare indicators, 
Peru had a relatively high rate of literacy (80 percent), owing in 
large part to the strong emphasis that both Belaunde regimes placed 
on education. The numbers of students enrolled in universities in- 
creased dramatically in the 1960s, and, consequently, so did their 
level of organization. Critics had justifiably contended that the em- 
phasis on education was at the expense of other key social welfare 
expenditures, such as health (see Health and Well-Being, ch. 2). 

Students had a strong tradition of political organization in Peru. 
For example, APRA began as a student and workers union. Stu- 
dent leaders, both of APRA and of the left, also played an impor- 
tant role in the protests against the military regime in the late 1970s. 
Congruent with the growth in relative strength of the Marxist left 
in politics was an increase in their presence in student organiza- 
tions. In early 1991 , there was a host of university student organi- 
zations, most allied with different factions of the left or with APRA. 
Some organizations were also allied with the SL or MRTA. Stu- 
dent supporters of the "new" right, such as the Liberty Move- 
ment, had also emerged, although they were by far in the minority. 
The increase in student organization had occurred in conjunction 
with the curbing of financing for universities and the shrinking of 
economic opportunities for university graduates, which had resulted 
in a radicalization of the university community in general. Although 
a few prestigious private universities continued to guarantee their 
students top degrees and professional opportunities, the quality of 
the education attained by large numbers of students at state univer- 
sities varied and was often quite poor. Thus, many universities in- 
creasingly had become havens for frustration (see Universities, 
ch. 2). 

The extreme manifestation of this phenomenon was the birth and 
growth of the SL in the University of Huamanga (Universidad de 
Huamanga) in Ayacucho in the 1970s. Abimael Guzman Reynoso, 
a professor at the university and eventually director of personnel, 
was the founder and leader of the SL. The SL virtually controlled 
the university for several years, and students were indoctrinated in 
the SL philosophy. The university trained students, mainly from 
the Ayacucho area, primarily in education; but a degree from 
Huamanga was considered inferior to one from a university in Lima, 
and students had few opportunities other than returning to their 
hometowns to teach. As jobs for graduates were few, becoming 



239 



Peru: A Country Study 

an active militant in the SL provided an opportunity of sorts (see 
also Internal Threats, ch. 5). 

An analogous phenomenon occurred in most of the universities 
in Lima in the 1980s. Poorly funded and staffed, universities had 
far more students than they could adequately train. Employment 
opportunities had virtually disappeared, and university graduates 
often ended up driving taxis. The oldest university in the Americas, 
the state-funded San Marcos University, had become the center 
of Peru's student radicalism. SL graffiti covered the walls; police 
raids on the university yielded large caches of weapons and am- 
munition, as well as arrests. Professors who openly sympathized 
with the SL were the norm. In 1989 student elections, members 
of the student organization that supported the SL won in first place 
and controlled facilities such as the cafeteria. 

Like union members, university students often were confronted 
with a dire predicament. They were the focus of SL organizational 
efforts, and at the same time their economic opportunities had vir- 
tually disappeared. Peaceful organizational efforts to improve their 
position had little potential in the current context, yet violent ef- 
forts were inextricably linked to the SL. Radicalism was in theory 
an appealing alternative, but in reality the ultraviolent form in which 
it manifested itself in the SL was hardly an alternative. Unfortu- 
nately, finding a job was also less and less a realistic alternative. 

News Media 

In 1990 Peru had one of the freest and most varied presses in 
the world, with virtually no curbs on what was published. The best 
established and largest circulating newspaper was the slightly con- 
servative daily, El Comercio. Expreso, owned by former minister of 
economy and finance Manuel Ulloa, was also slightly to the right 
of center. A variety of left-leaning dailies included Cambio, El Diario 
de Marka, and La Republica. Hoy was the pro-APRA daily. El Diario 
was a pro-SL newspaper that used to be published daily in Lima 
and circulated approximately 5,000 copies a day. The government 
closed it in late 1988, after the editor was accused of being a mem- 
ber of the SL, but it reappeared the next year as a weekly. A state- 
owned newspaper, El Peruano, published a daily listing of decrees 
and government proceedings. Oiga magazine was a right-wing 
weekly, Caretas and Si were centrist weeklies. Quehacer was a bi- 
monthly research publication sympathizing with the left. 

Peru had a total of 140 state and privately owned television chan- 
nels. Channel 4, the state-owned channel, provided relatively well- 
balanced news, as it had fierce competition from its private com- 
petitors. The popular weekly news program, "Panorama," which 



240 



Government and Politics 



broadcast in-depth interviews with a wide range of intellectuals, 
politicians, and even guerrillas, was quite influential. The MRTA, 
for example, made its entrance into national politics when its 
takeover of Juanjuf in San Martin Department was aired on 
Panorama. 

Peru's media were in general varied, competitive, and highly in- 
formative, and options from all sides of the political spectrum were 
available. Peru's population was a highly informed one, with even 
the poorest people usually having access to television. In early 1991 , 
when the intelligence police found a video of Abimael Guzman 
Reynoso dancing in a drunken stupor, it was aired on national 
television. When in early 1991 President Fujimori passed Decree 
Law 171, the media played a major role in raising public aware- 
ness as to the impunity that it imparted onto the armed forces and 
the threat that it posed to investigative journalism in the emergency 
zones. The publicity was in part responsible for the repeal of the 
decree in Congress. Indeed, the extent to which freedom of the 
press continued to exist in Peru, despite the many other obstacles 
to democratic government, was an important and positive force 
for Peru's democracy. 

Political Trends 

Roots of the 1990-91 Crisis 

There was no single explanation for the nature and severity of 
the crisis Peru faced in the early 1990s. The temptation to blame 
Garcia and APRA was a strong one, given their dismal perfor- 
mance in government, but the crisis had much deeper roots. APRA 
inherited a nation beset with economic and social problems, but 
a political climate in which the consensus on the need for reform 
was unprecedented. The manner in which APRA governed resulted 
in an exacerbation of an existing breach between state and soci- 
ety. Consensus gave way to polarization and fragmentation of the 
party system, and economic policy fell prey to internal party poli- 
tics, with disastrous results. 

The Transition to Democracy 

Like many other military establishments on the continent, the 
Peruvian military halted the civilian political process for a prolonged 
period of time (1968-80), attempted major structural economic 
change without a great deal of success, accumulated a large debt 
without public accountability, and then turned the political sys- 
tem back over to the same politicians it had previously ousted. The 
transition to democratic government, meanwhile, raised popular 



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Peru: A Country Study 



expectations that a fragile new democracy with severely constrained 
resources could hardly hope to meet. 

The 1980 elections were won, ironically, by Fernando Belaunde, 
whom the military had overthrown in 1968. His victory was no 
surprise, given that the elections were contested by a leaderless and 
divided APRA, recovering from the recent death of Hay a de la 
Torre, and by a fragmented left that presented what political scien- 
tist Sandra Woy Hazelton described as a "cacophony" of candi- 
dates and parties. Although Belaunde was a charismatic personality, 
he had spent the military years in exile, and was hopelessly out 
of touch with Peru's political realities in 1980. His government stuck 
stubbornly to a neoliberal, export-oriented economic model at a 
time when the world recession caused the prices of Peru's major 
export products to plummet. At the same time, the government 
fueled inflation through fiscal expenditures on major infrastruc- 
ture projects, ignoring the better judgment of the president of the 
Central Reserve Bank (Banco Central de Reservas — BCR, also 
known as Central Bank) (see The Search for New Directions, 
1980-85, ch.3). Popular expectations raised by the transition to 
democracy were soon frustrated. 

Despite the SL's launching of activities in 1980 and its substan- 
tial presence in Ayacucho by 1982, Belaunde refused to take the 
group seriously, dismissing them as narcoterrorists. When the 
government finally realized that the SL was a substantial security 
threat as a guerrilla and terrorist group, its reaction was too little, 
too late, and ultimately counterproductive. The government sent 
special counterinsurgency forces, the Sinchis, to the Ayacucho 
region, where they were given a free hand. The repressive nature 
of the military activities and the military's lack of understanding 
of the SL resulted in unwarranted repression against the local popu- 
lation. The actions of the Sinchis, if anything, played into the SL's 
hands. 

Natural disasters (floods and droughts) and economic decline and 
triple-digit inflation heightened the negative image of a govern- 
ment that was distant and detached from the population. This im- 
age was also exacerbated by Belaunde 's continuous insistence, amid 
economic crisis and the onset of guerrilla violence, that the solu- 
tion to Peru's problems was the building of the Jungle Border High- 
way {la carretera marginal de la selva or la marginal), linking the Amazon 
region of the country to the coast. The severity of the economic 
crisis of the Belaunde years and his government's poor public re- 
lations image opened the door for a major shift of the political spec- 
trum to the left. By late 1983, Garcia, as leader of the opposition 



242 



Government and Politics 



in Congress, began to tap the increasing support for a radical so- 
lution to Peru's problems. 

The Garcia Government, 1985-90 

By 1985 Garcia and APRA were well-positioned to win the 
presidential elections. Garcia was a charismatic orator who was con- 
vinced that he needed to "open up" APRA in order to win the 
nation's vote. He dropped all of APRA's sectarian symbols, such 
as the Aprista version of the Marseillaise and its six-pointed star, 
and replaced them with the popular song, "Mi Peru," and with 
slogans such as "my commitment is with all Peruvians." His at- 
tacks on neoliberal economics were directed primarily at foreign 
capital and the IMF, a convenient beating board because Peru was 
unlikely to get any capital inflow in the near future; he carefully 
avoided attacks on domestic capital. Thus, while cultivating the 
image of a radical among the poor, Garcia also was perceived as 
the mat menor, or lesser evil, by the private sector, as opposed to 
the Marxist left. Finally, even conservatives recognized the need 
for reform in Peru by 1985, given the increasing presence of the 
SL. Garcia defeated Alfonso Barrantes of the IU, taking 47.8 per- 
cent of the vote versus 22.2 percent for the IU (see table 19, Ap- 
pendix). A run-off election (required if an absolute majority is not 
attained) was not held because Barrantes declined to run. 

The first two years of the APRA government were a honeymoon 
of sorts. Garcia enjoyed unprecedented popularity ratings of over 
75 percent, owing in part to his populist personality and oratori- 
cal talents, and in part to the concertacion strategy the government 
pursued (see The Search for New Directions, ch. 3). It was highly 
successful as a short-term strategy for a severely depressed econ- 
omy, but obviously had its limits as a long-term plan. The private 
sector, meanwhile, gave Garcia and his concertacion strategy cau- 
tious support. 

By mid- 198 7 it was clear that concertacion had run its course, and 
a change of emphasis was necessary. At the same time, Garcia was 
also under pressure from the left and from some sectors within his 
own party to implement more radical structural change. In June 
he suffered a defeat within the party when his main rival, former 
prime minister Luis Alva Castro, was elected president of the 
Chamber of Deputies. Garcia at this point opted for a radical mea- 
sure that was intended to retake the political initiative from his 
rivals. In his annual independence day address on July 28, 1987, 
Garcia announced the surprise nationalization of the nation's banks. 
The measure was designed with a small group of advisers in the 
two weeks prior to its announcement, and few members of the 



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Peru: A Country Study 

APRA party or government were consulted. For example, the oc- 
togenarian vice president of the republic, Luis Alberto Sanchez, 
learned of the measure just prior to Garcia' s announcement, and 
he was told by none other than former president Belaunde. The 
measure in and of itself may not have been all that significant be- 
cause only 20 percent of the nation's banks remained in private 
hands in 1987. However, the manner in which Garcia presented 
it clearly indicated a change of political course. His rhetoric pitted 
the rich, lazy bankers against the poor, exploited people, and from 
that point on he began to speak of the "bad" capitalists. He 
launched a tirade of attacks on the domestic private sector, using 
precisely the kind of rhetoric he had avoided in the campaign and 
for the first two years of his presidency. 

The private sector's fragile trust in Garcia and the historically 
confrontational APRA was undermined. The situation was exacer- 
bated by the manner in which APRA silently supported the mea- 
sure and by the fact that those members of the party who spoke 
out against the measure were expelled. Foremost among these was 
the influential senator Jorge Torres Vallejo, who ironically was the 
person who had launched Garcia 's candidacy as secretary general 
of APRA in 1983. 

The nationalization of the banks marked the beginning of the 
end. Political polarization set in, and the government increasingly 
lost coherence. The then moribund right found a cause and a can- 
didate for its renovation, and latched onto the protest movement 
against the measure that was launched by Mario Vargas Llosa and 
his Liberty Movement. The left had no real cause to support the 
measure or to ally with the highly sectarian APRA. The poor, who 
lacked savings accounts, were hardly likely to rally to Garcia' s cause. 
The private sector withdrew its plans for investment as economic 
policy-making fell prey to political infighting in APRA and to 
Garcia' s own erratic behavior. In September 1988, the time when 
an austerity package was announced, Garcia went into hiding in 
the palace and did not appear for a period of over thirty days. 

Although reserves had run out, the government continued to 
maintain unrealistic subsidies, such as the five-tier exchange rate, 
funded by a growing fiscal deficit, which fueled hyperinflation. The 
situation was exacerbated by the constant resource drain from in- 
efficient state enterprises, whose bureaucracy increased markedly 
during the APRA government. The combination of hyperinflation 
and public-sector debts that could not be paid resulted in a state 
that had virtually ceased to function. Living standards dropped 
dramatically as real wages were eroded by inflation, and services 
for the public, such as public hospital staff, were curbed markedly. 



244 



Government and Politics 



By the end of the APRA government, shortages of the most basic 
goods, such as water and electricity, were the norm. Economist 
Jeffrey D. Sachs, on a visit to Lima in June 1990, described the 
country as "slipping away from the rest of the world." 

To make matters worse, a host of corruption scandals involving 
APRA became publicly evident at this point. The atmosphere of 
chaos and economic disorder, the virtual nonfunctioning of the state, 
and the perception of corruption in the highest ranks of govern- 
ment and law enforcement all served to discredit state institutions 
and political parties, particularly APRA. 

Economic decline was accompanied by a dramatic surge in in- 
surgent and criminal violence. In addition to violence from the SL 
and MRTA, there was a rise in death squads linked to the govern- 
ment and armed forces. These included the Rodrigo Franco Com- 
mand. Deaths from political violence in the 1980s approached 
20,000, and in 1990 alone there were 3,384 such deaths, a figure 
greater than that from Lebanon's civil war that year. Peru also 
ranked as the country with the highest number of disappearances 
in the world (see Changing Threats to National Security, ch. 5). 
In the context of political violence and economic disorder, crimi- 
nal violence also surged (see Crime and Punishment, ch. 5). 

The 1990 Campaign and Elections 

Although Alberto Fujimori was elected by a large popular mar- 
gin, he had no organized or institutionalized base of support. There 
have been countless theories as to why Fujimori was able to rise 
from virtual anonymity to the national presidency in the course 
of three months. More than anything else, the Fujimori tsunami, 
as it was called, was a rejection of all established political parties: 
the right, despite its refurbished image; the squabbling and hope- 
lessly divided far left; and certainly the left-of-center APRA be- 
cause of its disastrous performance in government. Fujimori was 
able to capture the traditional support base of APRA: small entre- 
preneurial groups and those sectors of the middle class for whom 
APRA was no longer an acceptable alternative, but for whom the 
conservative Fredemo was also unacceptable. In addition, Fuji- 
mori's success was attributed largely to a great deal of support at 
the grassroots level. 

After serving as a UNA rector and host of a popular television 
program called "Concertando," Fujimori entered politics in 1989, 
running on a simple, if vague, platform of "Work, Honesty, and 
Technology." His appeal had several dimensions. First, his ex- 
perience as an engineer, rather than a politician, and his lack of 
ties to any of the established parties clearly played into his favor. 



245 



Peru: A Country Study 

APRA's incoherent conduct of government had led to an economic 
crisis of unprecedented proportions; at the same time, the polar- 
ized political debate and the derogatory mudslinging that charac- 
terized the electoral campaign did not seem to offer any positive 
solutions. The right preached free-market ideology with a fervor 
and made little attempt to appeal to the poor. The left was hope- 
lessly divided and unable to provide a credible alternative to the 
failure of "heterodox" economic policy. Thus, not only was APRA 
discredited, but so were all established politicians. 

In addition, and key to his popular appeal, were Fujimori's ori- 
gins as the son of Japanese immigrants. His Japanese ties also 
aroused some hopes, whether realistic or not, that in the event of 
his victory the Japanese would extend substantial amounts of aid 
to Peru. He capitalized on Vargas Llosa's lack of appeal to the 
poor by promising not to implement a painful "shock" economic 
adjustment program to end inflation and with slogans like "un 
presidente como tu" ("a president like you"). The claim of this 
first-generation Japanese-Peruvian that he was just like the majority 
in a predominantly mestizo (see Glossary) and native American 
nation seemed less than credible, and his vague promises of "gradu- 
ally" ending hyperinflation seemed glibly unrealistic. Neverthe- 
less, his message was much more palatable to an already severely 
impoverished population than Vargas Llosa's more realistic but 
bluntly phrased calls for a shock austerity program to end infla- 
tion. "El shock' ' had become a common term in the electoral cam- 
paign and among all sectors of society. 

Fujimori's success was also enhanced by his rather eclectic po- 
litical team, Cambio '90, which was extremely active in campaign- 
ing at the grassroots level. Cambio had an appeal at this level 
precisely because it was an unknown entity and was not affiliated 
with the traditional political system. 

In the first round of elections, Vargas Llosa attained 28.2 per- 
cent of the vote; Fujimori, 24.3 percent; the APRA, 19.6 percent; 
IU, 7.1 percent; and ASI, 4. 1 percent. Null and blank votes were 
14.4 percent of the total (see table 21). It was then clear that the 
left and APRA would back Fujimori, if for no other reason than 
to defeat Vargas Llosa in the second round. Vargas Llosa was seen 
as a representative of the traditional, conservative elite, and thus 
was unacceptable for ideological reasons. In Luis Alva Castro's 
words to APRA: "Compafieros (partners), our support for Fujimori 
is a given, but there is no need to make an institutional commit- 
ment." A similar stance was taken by the left. 

The support of the left and APRA virtually guaranteed Fujimori's 
victory in the second round, but it by no means signified an 



246 



Government and Politics 



organized or institutionalized support base, either inside or out- 
side Congress. The lack of such a base presented a formidable ob- 
stacle for a Fujimori government that already had an uncertain 
future. The electoral campaign, meanwhile, was waged in extremely 
negative and ad hominem terms and took on both racial and class 
confrontational overtones. It became a struggle between the "rich 
whites' 5 and the "poor Indians," exacerbating the existing polari- 
zation in the system. The political mudslinging and personal at- 
tacks, first by Fredemo against APRA and President Garcia, and 
then between the Fujimori and Vargas Llosa teams, offended the 
average voter. 

The conduct of the 1990 electoral campaign, in conjunction with 
the prolonged period of political polarization that preceded it, se- 
verely undermined faith in the established system and the political 
parties and leaders that were a part of it. This loss of faith, more 
than anything else, played into the hands of Fujimori and was 
responsible for his victory. In the second round of voting, on June 
10, 1993, he attained 56.5 percent of the vote over 33.9 percent 
for Vargas Llosa. 

The Fujimori government came to power without a coherent 
team of advisers, a program for governing, or any indication of 
who would hold the key positions in the government. Fujimori's 
advisers were from diverse sides of the political spectrum, and he 
made no clear choices among them, as they themselves admitted. 
At the same time, he made it clear that he would reestablish rela- 
tions with the international financial community, and that he was 
not interested in a radical economic program. How he would recon- 
cile those goals in the context of hyperinflation, with his promise 
not to implement a shock- stabilization plan, was the cause of a great 
deal of uncertainty. 

The 1990 electoral results reflected a total dissatisfaction with 
and lack of faith in traditional politicians and parties on the part 
of the populace. Fredemo 's dogmatic and heavy-handed campaign 
was partially to blame for undermining that faith, as were a suc- 
cession of weak or inept governments for the past several decades. 
Yet, in the short-term, the disastrous failure of APRA, the coun- 
try's only well-institutionalized political party, was most directly 
to blame. The results of the 1990 elections merely demonstrated 
the exacerbation of a preexisting breach between state and society 
in Peru that had occurred from 1985 to 1990. The rejection of tradi- 
tional parties did not necessarily reflect a rejection of the democratic 
system. Instead, it reflected an ongoing evolution of participation 
occurring outside the realm of traditional political institutions, as 



247 



Peru: A Country Study 

well as the increased importance of autonomous local groups and 
the informal economy (see table 22; table 23, Appendix). 

The 1990 electoral results also indicated a crisis of representa- 
tion. Political parties play a fundamental, representative role in 
virtually all consolidated democracies; their utility in formulating 
and channeling demands in both directions — from society to state 
and state to society — is an irreplaceable one. In Peru, as in many 
developing countries, demands on the state for basic services had 
clearly outpaced its ability to respond. Thus, the role of parties 
in channeling those demands, and — through the party platform or 
doctrine — indicating their relative importance, was critical. How 
Fujimori would govern a fragmented and polarized political sys- 
tem without an institutionalized party base remained unclear at best. 

Impact of the "Fujishock" Program 

In 1990 Peru's political spectrum and party system were pola- 
rized to an unprecedented degree. In addition, the vote for Fujimori 
was to a large extent a vote against the shock stabilization plan 
that Vargas Llosa had proposed to implement. After less than a 
month in government, however, Fujimori was convinced, both by 
domestic advisers and prominent members in the international 
financial community, that he had to implement an orthodox shock 
program to stabilize inflation and generate enough revenue so that 
the government could operate (see The Search for New Directions, 
ch. 3). During his visits to the United States and Japan in July 
1990, it was made very clear to Fujimori that unless Peru adopted 
a relatively orthodox economic strategy and stabilized hyperinfla- 
tion, there would be no possibility of Peru's reentry into the inter- 
national financial community, and therefore no international aid. 
At this point, Fujimori opted for an orthodox approach and ap- 
pointed Juan Carlos Hurtado Miller as minister of economy and 
prime minister. Later that month, many of Fujimori's original ad- 
visers, who were heterodox economists, left the Cambio team. Thus, 
on August 8, 1990, Fujimori implemented precisely the program 
that he had campaigned against (see The Search for New Direc- 
tions, 1990-91, ch. 3). 

The shock program was more extreme than even the most or- 
thodox IMF economist was recommending at the time. Plans for 
liberalization of the trading system and for privatization of several 
state industries were made for the near future. Overnight, Lima 
became a city that had, in the words of several observers, ''Ban- 
gladesh salaries with Tokyo prices." 

Despite widespread fears that the measures would cause popu- 
lar unrest, reaction was surprisingly calm for several reasons. First 



248 



Alberto K. Fujimori 
Courtesy Embassy of Peru, 
Washington 





of all, the measures were so extreme that they made day-to-day 
economic survival the primary concern of the majority of the popu- 
lation, including the middle class. Taking time to protest was an 
unaffordable luxury. Second, street protest and violence were in- 
creasingly associated with insurrectionary groups and political vio- 
lence, with which the average Peruvian had no desire to be 
associated. Third, the benefits from ending hyperinflation and 
recovering some sort of economic stability were immediately evi- 
dent to Peruvians at all levels, even the very poor. Even several 
months after the shock, the most popular man in Peru was the ar- 
chitect of the program, Hurtado Miller. Although Fujimori's 
popularity suffered a decline after his first few months in office, 
it was not necessarily a result of the economic program. Finally, 
and perhaps most importantly, most people voted for Fujimori not 
only because of his vague promises, but also because of the per- 
ception that, unlike Vargas Llosa, he was much more a man of 
the people. Thus, his implementing an "antipopular" economic 
program was far more acceptable politically than Vargas Llosa' s 
doing virtually the same thing. 

Prospects for the Fujimori Government 

In some ways, these trends signified positive prospects for the 
Fujimori government. The degree of consensus on the economic 
approach was remarkable for a country as polarized both ideologically 



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Peru: A Country Study 



and politically as Peru. Fujimori's original cabinet was an eclectic 
and pragmatic one, including members of virtually all political 
camps. Despite this diversity, a consensus eventually emerged. 

Yet, there were some extremely worrisome trends as well. In 
addition to the economic shock program, the government promised 
a social emergency program to protect the poorest by providing 
temporary food aid and employment. However, no such program 
had materialized over a year into the government. Although the 
failure to implement such a program was explained in part by 
resource constraints, it was also explained, in large part, by lack 
of political will: no one person had any bureaucratic responsibility 
for the needs of the poor. 

In other countries implementing shock economic programs, tem- 
porary measures to compensate the poor have played important 
social welfare and political roles in making economic reform more 
acceptable and viable. In addition, they have played an important 
role in providing foreign donors with a single bureaucratic entity 
through which to channel necessary aid. The lack of such a pro- 
gram on any significant scale in Peru was unfortunate because socio- 
economic indicators had already deteriorated markedly prior to the 
adjustment program and in areas where the threat of increasing 
insurrectionary violence was a realistic one (see Health and Weil- 
Being, ch. 2). 

Despite the new political dynamics, the tradition of centralized 
and authoritarian presidential leadership remained intact. Fujimori 
had a strong tendency to attempt to control his ministers and to 
appoint loyalists. Some of the most talented and independent- 
minded ministers left the cabinet after a few months because 
Fujimori had undermined their authority. These included Carlos 
Amat y Leon y Chavez, the minister of agriculture; Gloria Heifer 
Palacios, the minister of education; Carlos Vidal Layseca, the 
minister of public health; and even Prime Minister Hurtado him- 
self in March 1991. After Hurtado's resignation, Fujimori sepa- 
rated the positions of prime minister and economics minister, 
presumably so that he could have more relative control than he 
had with the popular Hurtado. Also telling was Fujimori's insis- 
tence on the appointment of Jorge Chavez Alvarez, a young and 
relatively inexperienced doctoral student, as president of the Cen- 
tral Bank, despite the misgivings of virtually all respected econo- 
mists. Chavez was seen as a Fujimori loyalist through whom the 
president could manipulate and control the Central Bank. 

In addition, Fujimori's need to make an "unholy" alliance with 
APRA in Congress to get measures passed acted as a barrier to 
the reform of the state sector. APRA had been the only political 



250 



Government and Politics 



force to back the Chavez appointment, and it was widely perceived 
that Fujimori would have a political price to pay for that backing 
in the future. Indicative of the price was a debate within the Ministry 
of Education, in which Fujimori supported APRA against his own 
minister, Gloria Heifer. She was trying to trim the size of the minis- 
try, which had grown to unrealistic proportions during the APRA 
government because of its filling of posts for party reasons. The 
row resulted in the resignation of Heifer and a stalling of the re- 
form of the public education sector. 

The age-old tradition of centralism also prevailed. For financial 
reasons and lack of political will, the regionalization process was 
stalled. Under existing conditions, regional governments were lit- 
tle more than politicized bureaucracies. 

Finally, and most worrisome, was the resurgence of another tra- 
dition in Peru — government reliance on the military for power. 
Fujimori lacked any institutionalized base and had cultivated strong 
ties with the military by granting it what it wished, as demonstrated 
by his attempt to legalize its impunity through Decree Law 171. 

There are many plausible explanations for the autogolpe. The most 
significant one, which has been noted here, was Fujimori's lack 
of organized or party -based support, resulting in his increasing reli- 
ance on the armed forces and on rule by decree. By early 1992, 
APRA stopped supporting Fujimori and coalesced the opposition 
in Congress, somewhat ironically, under the leadership targeted 
by government repression after the coup, indicative of the extent 
to which the government felt threatened by APRA opposition. In 
March there had been a politically damaging scandal among 
Fujimori's close circle of advisors, in which his wife publicly accused 
his brother, his closest advisor, of misuse of foreign aid donations. 
Another of Fujimori's close advisors, Vladimiro Montesinos Torres, 
the de facto head of the National Intelligence Service (Servicio de 
Inteligencia Nacional — SIN), had been pressuring the president 
for some time to free the counterinsurgency struggle from judicial 
interference. This pressure coincided with a major SL assault on 
Lima. At the same time, relations with the United States were at 
an all-time low because of disagreements over counternarcotics 
strategy; the negative environment possibly led Fujimori to con- 
clude that he had little to lose from jeopardizing relations with the 
United States. 

There was the possibility that Fujimori would abide by the time- 
table that he set out and reinstate the parliament one year later. 
Yet, the undermining of the constitutional system had far-reaching 
costs. First, democratic development is not attained by rescinding 
the constitution and the institutions of government whenever a crisis 



251 



Peru: A Country Study 

is perceived. Second, Fujimori had been able to pass virtually all 
the laws pertaining to his economic program by the decree powers 
awarded to him by the Congress; continuing the economic pro- 
gram was not the reason for its closing. If anything, the program 
was seriously jeopardized by the international isolation that the coup 
precipitated because of the critical role that international financial 
support played. Third, the elimination of important constitution- 
al rights, such as habeas corpus, for over a year was likely to result 
in a worsening of Peru's already poor human rights record. The 
coup also played into the SL's strategy of provoking a coup in order 
to polarize society into military and nonmilitary camps. Finally, 
a yes or no plebiscite is a tool that has been used to establish popu- 
lar support by a number of dictators, including Benito Mussolini 
and Ferdinand Marcos. Given short-term popular support for 
almost any kind of drastic solution to Peru's many problems, there 
was a very high risk that Fujimori and the military would use the 
plebiscite as a tool to justify further undermining Peru's constitu- 
tional system. 

Peru was clearly in a critical situation, where extreme economic 
deterioration and spiraling political violence had to be reversed as 
a prerequisite to democratic consolidation. Neither was a simple 
process, and there was no guarantee that Peru's fragile institutions 
would survive the challenge; they were jeopardized severely by the 
measures taken on April 5, 1992. In the short term, in addition 
to the rapid restoration of constitutional democracy, an important 
first step would be a more visible and tangible commitment to the 
poorest sectors, which were suffering the most from the economic 
program, had the smallest margin for deterioration in their living 
standards, and were the primary focus of insurgent groups as well. 
The outbreak of a cholera epidemic in 1991 was a prime example 
of the extent to which social welfare infrastructure and other needs 
of the poor had been sorely neglected for several years. Otherwise, 
despite all good intentions on the economic front, the social peace 
necessary to reestablish and consolidate democratic government 
would be unattainable. 

Foreign Relations 

The emergence of highly nationalistic forces in Peru's political 
system during the 1960s was accompanied by a marked shift in 
the nation's approach to foreign relations. A desire to alter Peru's 
traditionally passive role in foreign affairs, which had led to what 
was perceived as inordinate influence by foreign countries — and 
particularly the United States — in the political and economic life 
of the nation, became a central objective of the Velasco Alvarado 



252 



Government and Politics 



regime. During the 1970s, Peru's military government sought an 
independent, nonaligned course in its foreign relations that 
paralleled the mixed socioeconomic policies of its domestic reform 
program. Diplomatic dealings and foreign trade were thus diver- 
sified; official contacts with the nations of the communist world, 
Western Europe, and Asia were significantly expanded during the 
decade, while the United States' official presence receded from its 
once predominant position. Multilateral relations, particularly with 
Latin American neighbors that shared economic and political in- 
terests common to many Third World nations, also assumed a new 
importance. 

Peru's foreign policy initiatives were undertaken in part as an 
effort to gain international support for the military government's 
experiment in "revolution from above." The initial success of many 
programs of the military government brought it considerable in- 
ternational prestige and thus, during the early 1970s, Peru became 
a leading voice for Third World nations. As the fortunes of the 
Peruvian experiment fell during the late 1970s, however, its inter- 
national profile receded markedly. The Belaunde government 
deemphasized further the nonaligned stance of the military govern- 
ment while working toward closer relationships with the United 
States and the nations of Latin America. 

Foreign Relations under Garcia 

Traditionally, Peru was an active and initiating member of 
regional multilateral organizations, such as the Andean Pact (see 
Glossary). Yet, the nation's economic crisis and Garcia' s loss of 
prestige, both within and outside Peru, forced the country to turn 
inward and abandon its high-profile stance. Peru's stance on the 
international front was influenced to a great extent by the rise and 
fall of Garcia' s anti-imperialist strategy. His anti-imperialist and 
anti-IMF rhetoric, as well as his unilateral limitation of debt pay- 
ments, placed a major strain on relations with the international 
financial community and the United States in particular. 

Under Belaunde, a de facto moratorium on debt service already 
had existed. By 1985 it was clear that no new capital was headed 
in Peru's direction and that the country could not afford to pay 
its debt. Garcia took an openly confrontational approach, with the 
hope that the rest of Latin America would follow. At the time, there 
were speculations that the threat posed by Garcia was one reason 
the Ronald Reagan administration (1981-89) presented the Baker 
debt-reduction plan (see Glossary) in October 1985. 

Although Garcia' s debt policy limited payments to 10 percent 
of export earnings, in reality the government paid approximately 



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Peru: A Country Study 

20 percent for the first few years, but then stopped making any 
payments at all. Garcia' s insistence on maintaining a confronta- 
tional stance, even after its political utility was exhausted, was coun- 
terproductive. On several occasions, accords in principle with the 
IMF were prepared with representatives of the APRA government 
and the IMF, and then cancelled at the last minute by Garcia. 
Garcia' s stance initially had some appeal among Third World 
debtor countries, and a few even followed his example. As the limits 
to Peru's economic strategy became evident both at home and 
abroad, however, his stubborn adherence to the policy became the 
subject of ridicule rather than respect. Peru was declared ineligi- 
ble for IMF funds in August 1986, and was threatened with ex- 
pulsion from the organization in October 1989. 

Garcia also made heightening Peru's visibility in the Nonaligned 
Movement and in the Socialist International a priority. Ties were 
expanded with a number of Third World socialist nations, includ- 
ing Angola, Mozambique, and Zimbabwe; and Garcia took a 
staunchly pro-Sandinista position in the Central American con- 
flict. Improving Peru's relations with its neighbors, particularly 
Ecuador and Chile, was also a priority early on. Although some 
productive discussions were held with Ecuador, including a historic 
visit by Peru's minister of finance to Quito in October 1985, 
progress was limited by competition with both the Ecuadorian and 
Chilean military establishments. Garcia' s attempts to curb mili- 
tary expenditures were not reciprocated by Chile, for example. 

As the economic crisis in Peru deepened, meanwhile, Garcia took 
a lower profile stance on the foreign policy front. Relations with 
the United States remained remarkably good despite Garcia' s 
stances on debt and on Central America. This fact was in part owing 
to Washington's desire to maintain good bilateral relations because 
of the threat of instability caused by the SL. Thus, foreign aid flows 
were maintained despite Peru's violation of the Brooke Alexander 
Amendment, which makes a country ineligible for United States 
aid if it is over a year late in repaying military assistance. Garcia' s 
willingness to collaborate, at least rhetorically, on the drug issue, 
in sharp contrast to his stance on debt, helped ameliorate relations. 
Finally, relations were maintained because of a good working rela- 
tionship between United States ambassador Alexander Watson and 
President Garcia. 

Peru's relations with its neighbors were strained also by the ex- 
tent of the economic crisis and the cholera epidemic. In late 1989, 
over 6,000 Peruvians crossed the border to Chile in order to buy 
bread, which was scarce and expensive in Peru. Chile's dictator 
Augusto Pinochet Ugarte (1973-90), when campaigning prior to 



254 



Government and Politics 



the 1988 plebiscite, warned of the dangers of populist democracy 
by pointing out neighboring Peru. Contraband trade along the 
Chilean and Ecuadorian borders at times has been a contentious 
issue. The thousands of Peruvians emigrating to neighboring coun- 
tries seeking employment were another concern. The fear of the 
spread of subversion over neighboring borders also worried Peru's 
neighbors, a concern heightened by events such as the SL's as- 
sassination of a Peruvian military attache in La Paz and by the 
MRTA's support of the 19th of April Movement (Movimiento 19 
de Abril), a Colombian guerrilla group. 

Foreign Relations under Fujimori 

Fujimori set out to repair Peru's foreign relations, particularly 
with its creditors. He campaigned on, and was committed to, a 
strategy of "reinsertion" into the international financial commu- 
nity. This commitment forced him to change his adherence to 
"gradualist" economics and to open dialogue with the major multi- 
lateral institutions. 

Peru's foreign relations situation changed dramatically with the 
April 5 self-coup. The international community's reaction was ap- 
propriately negative. Most international financial organizations 
delayed planned or projected loans, and the United States govern- 
ment suspended all aid other than humanitarian assistance. Ger- 
many and Spain also suspended aid to Peru. Venezuela broke off 
diplomatic relations, and Argentina withdrew its ambassador. The 
coup threatened the entire economic recovery strategy of reinser- 
tion. In addition, the withdrawal of aid by key members of Peru's 
support group made the process of clearing arrears with the IMF 
virtually impossible. Yet, despite international condemnation, 
Fujimori refused to rescind the suspension of constitutional govern- 
ment, and the armed forces reasserted their support for the mea- 
sures. 

Even before the coup, relations with the United States were 
strained because they were dominated by the drug issue and 
Fujimori's reluctance to sign an accord that would increase United 
States and Peruvian military efforts in eradicating coca fields. 
Although Fujimori eventually signed the accord in May 1991 in 
order to get desperately needed aid, the disagreements did little 
to enhance bilateral relations. The Peruvians saw drugs as primarily 
a United States problem and the least of their concerns, given the 
economic crisis, the SL, and the outbreak of cholera. 

The cholera outbreak at first resulted in neighboring countries' 
banning Peruvian food imports, further straining relations. Even 
after the ban was lifted for certain products, fear of the spread of 



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Peru: A Country Study 

cholera was confirmed by cases reported in Colombia, Ecuador, 
Chile, and Brazil. 

By the early 1990s, economic trends in Latin America were mov- 
ing increasingly toward free-trade agreements with the United States 
and regional market integration, such as the Southern Cone Com- 
mon Market (Mercado Comun del Sur — Mercosur; see Glossary). 
Although the Andean Pact agreed to form a common market in 
late 1990, Peru's role, because of the extent and nature of its cri- 
sis, remained marginal, at least in the short term. Fujimori was 
so overwhelmed with domestic problems early into his government, 
moreover, that he was unable to attend the Group of Eight (see 
Glossary) meeting in late 1990. 

Although Peru could have been eligible for special drug-related 
assistance and trade arrangements with the United States under 
the Andean Initiative (see Glossary), Peruvian-United States re- 
lations were hardly smooth on the drug front during Fujimori's 
first year in office. Meanwhile, Peru's eligibility for debt reduc- 
tion and grants for investment-related reforms under the George 
H.W. Bush administration's Enterprise for the Americas Initia- 
tive (see Glossary) were restricted by its arrears with multilateral 
credit agencies and private banks. 

On the debt front, relations with international institutions were 
improving, and after six months of negotiations, Peru was able to 
obtain the US$800-million bridge loan required to re-establish its 
borrowing eligibility from the IMF. Yet, Peru still had to pay 
US$600 million to international creditors. It seemed that for the 
foreseeable future, any credit inflows would merely be recycled to 
pay existing debts and arrears (see Foreign Trade and the Balance 
of Payments, ch. 3). Prior to the coup of April 5, 1992, however, 
almost all of the US$1.3 billion necessary to clear arrears with the 
IMF had been attained. 

Peru had established a strong military relationship with the 
Soviets and Eastern Europe during the Velasco years and was the 
Soviets' largest military client on the continent in the 1970s. Be- 
cause of a reliance on Soviet military equipment, this relationship 
has continued, although Peru has diversified its source of supply 
of weapons and now buys from countries ranging from France to 
North Korea (see Changing Foreign Military Missions and Im- 
pacts, ch. 5). In addition, like its relationship with Cuba, Peru's 
relationship with the Russians is certain to diminish in importance 
as Russia and Peru turn inward to deal with domestic crises and 
economic rather than strategic issues dominate the agenda. Reflect- 
ing this change is the new importance placed on relations with the 
United States and also with Japan, the latter largely because of 



256 



Government and Politics 



Fujimori's heritage and the emphasis that he himself placed on the 
Japanese role during the electoral campaign. More than anything 
else, Peru's foreign relations were expected to be dominated by 
the nation's need for foreign aid, capital, and credit, all of which 
hinged on the republic's solving its internal economic problems, 
cooperating with the United States on the drug issue, and dealing 
with the challenge from insurgent groups. Additionally, most of 
the international community remained unwilling to provide credit 
or aid until democratic government was restored. 

* * * 

David Scott Palmer's Peru: The Authoritarian Tradition offers a good 
overview of Peruvian political development through the early 1980s. 
The most comprehensive treatment of the development of Peru's 
state sector and public policy framework is Rosemary Thorp and 
Geoffrey Bertram's Peru 1890-1977. Cynthia McClintock and Abra- 
ham F. Lowenthal's edited collection of essays, The Peruvian Ex- 
periment Reconsidered, is a balanced description of the military years 
and covers a wide range of political and economic issues. Peru's 
transition to democracy is detailed in Stephen M. Gorman's Post- 
Revolutionary Peru. Carol Graham's Peru's APRA is the first single- 
volume description of the Garcia government and APRA in power. 
Hernando de Soto's detailed description of the Peruvian informal 
sector and regulatory framework, The Other Path, sparked an ex- 
tensive debate on the role of the informal sector and its relation 
to the state in Latin America. A good article on Fujimori's self- 
coup is Eduardo Ferrero Costa's "Peru's Presidential Coup." On 
the challenges to the political system posed by the human rights 
situation, see Angela Cornell and Kenneth Roberts's "Democracy, 
Counterinsurgency, and Human Rights." (For further informa- 
tion and complete citations, see Bibliography.) 



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Chapter 5. National Security 




Mochican warrior art found on a ceramic vase 



THE MILITARY AND THE HISTORY of Peru are inextrica- 
bly intertwined. From 1821, when Jose de San Martin declared 
independence from Spain, through 1991, military officials have 
served in the top political office more often than civilians, that is, 
fifty-two out of eighty-one heads of state, for ninety-eight out of 
171 years. Furthermore, the military has been instrumental in help- 
ing to bring to power by force almost half of the twenty-nine civilian 
presidents. 

The constitution of 1979 was approved by an elected civilian Con- 
stituent Assembly during Peru's longest sustained period of institu- 
tionalized military rule (1968-80); however, the constitution could 
not have been promulgated or put into effect on July 28, 1980, 
when power passed to an elected civilian president, without the 
acquiescence of the armed forces (Fuerzas Armadas — FF.AA.). The 
receipt of the presidential sash by Alberto K. Fujimori on July 28, 
1990, represented the first time since 1903 that three elected civilians 
in succession had become head of state without interruption by mili- 
tary action. Put another way, the 1980-91 period represented the 
longest sustained era of electoral politics in Peru since that of 
1895-1914, the country's only other time of continuing civilian rule 
through regular elections. It was ended by President Fujimori's 
self-coup iautogolpe) on April 5, 1992, in a manner reminiscent of 
Augusto B. Leguia y Salcedo (1908-12, 1919-30) when, after be- 
ing elected president in 1919, he made himself dictator by decla- 
ration. 

In many ways, nevertheless, this most recent period of elected 
civilian rule, with the military serving as protectors and defenders 
of democracy, was even more difficult to sustain. The problems 
faced by the government of Peru during the 1980-91 period were 
viewed by some observers to be the most daunting in the Western 
Hemisphere. These problems included a decline in the gross na- 
tional product (GNP — see Glossary) of about 40 percent through 
1991; an inflation rate of over 100 percent per year in the early 
1980s that increased to between 1,600 percent and 7,600 percent 
per year from 1988 through 1990; a government that increased its 
employment rolls by over 60 percent from 1985 to 1990, while its 
taxation capacity declined by over 75 percent and thus sharply 
reduced its delivery of basic services; narcotics production and 
trafficking, along with substantial corruption, violence, and ad- 
diction; and guerrilla insurgencies by the Shining Path (Sendero 



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Peru: A Country Study 

Luminoso — SL) and the Tupac Amaru Revolutionary Movement 
(Movimiento Revolucionario Tupac Amaru — MRTA) that had 
resulted in over 25,000 deaths, more than 3,000 disappearances, 
and some US$22 billion in direct and indirect property damage 
through 1992. 

After great initial reluctance, Peru's elected presidents increas- 
ingly used the state of emergency decree to try to cope with the 
country's difficulties, primarily the insurgency. Under the consti- 
tution of 1979, the president could declare states of emergency to 
deal with threats to public order. These presidential decrees per- 
mitted military authorities to temporarily assume political as well 
as military control of the districts, provinces, departments, or 
regions specified. Constitutional guarantees of sanctity of domicile, 
free movement and residence, public meetings, and freedom from 
arrest without a written court order would be suspended. From 
five provinces declared to be in a state of emergency in December 
1982, the number steadily increased to thirteen in 1984, twenty- 
three in June 1987, fifty-six in July 1989, sixty-three in July 1990, 
and eighty-seven by May 1991. As of mid-1991, over 47 percent 
of Peru's 183 provinces, which included some 56 percent of the 
country's population of more than 22.3 million, were part of emer- 
gency military zones under military control. Although some crit- 
ics argued that Peru was operating under a de facto military 
government, the armed forces insisted that they were only fulfill- 
ing their constitutional mandate to protect civilian rule and had 
no interest in carrying out another coup. 

Between 1980 and 1990, the size of the FF.AA. increased by 
some 30 percent, from about 92,000 to about 120,000, with close 
to two-thirds made up of conscripts. In 1992 the total figure was 
112,000. The Peruvian Army (Ejercito Peruano — EP) remained 
by far the largest service, growing from 70,000 in 1980 to around 
80,000 in 1990, but declining to 75,000 in 1992. The Peruvian Navy 
(Marina de Guerra del Peru — MGP) more than doubled in size 
during the decade, from 12,000 to 25,000, but declined to 22,000 
in 1992. The Peruvian Air Force (Fuerza Aerea del Peru — FAP) 
increased by about 50 percent, from 10,000 to 15,000 (its strength 
in 1992). Peru's unprecedented economic crisis of the late 1980s 
and early 1990s substantially reduced military salaries and main- 
tenance capacity and began to threaten the excellent training and 
strong professionalism at all levels — officer, technician, and non- 
commissioned officer (NCO) — that had been gradually built up 
during the post-World War II period. 

The FF.AA. 's close relationship with United States counterparts 
from the 1940s well into the 1960s contributed significantly to this 



262 



National Security 



professional and material development. Between 1947 and 1975, 
the United States military trained 930 Peruvian military person- 
nel in the United States, 2,455 in facilities in the Canal Zone of 
Panama, and 3,349 in Peru. The United States military mission 
in Peru peaked at sixty-six members in the mid-1960s, with mili- 
tary sales and assistance from 1955 to 1979 totaling some US$261 
million. For a variety of political and military reasons, the Peruvian 
military regime expelled the United States military mission in July 
1969 and began to diversify its training and supply relationships 
from the late 1960s onward. Beginning in 1973, the EP and FAP, 
but not the navy, undertook what was to become a substantial rela- 
tionship with the Soviet Union that included the purchase of equip- 
ment totaling between US$1 .2 and US$1 .5 billion, a sizable training 
component in the Soviet Union (between 100 and 400 Peruvian 
officers), and a significant Soviet military mission in Peru (between 
25 and 100). Peru's was the only Latin American military besides 
Cuba's to equip its forces with Soviet materiel. At the same time, 
the FF.AA. received substantial equipment from other supplying 
countries to become, by the end of the 1980s, the most diversified 
in the region in terms of foreign sources of arms and equipment. 

Despite the substantial domestic insurgency, the FF.AA. con- 
tinued to focus on potential external problems with Ecuador and 
Chile, and based the bulk of their forces (80 percent) in these border 
areas in 1991 . The Peruvian military was concerned about Chile's 
rapid military expansion beginning in the mid-1970s and its ef- 
forts at that time to give Bolivia an outlet to the sea through for- 
mer Peruvian territory lost in the War of the Pacific (1879-83) with 
Chile. The FF.AA. were also concerned about Ecuador's unwill- 
ingness since the 1960s to accept the Protocol of Rio de Janeiro 
of 1942 (Rio Protocol; see Glossary), which defined a border be- 
tween Peru and Ecuador that gave Peru most of the previously dis- 
puted Amazon territory. In 1981 Ecuadorian forces, using Paquisha 
as a base, attempted to secretiy regain access to the Amazon through 
a seventy-eight-kilometer border zone, erroneously demarcated for 
the Rio Protocol (see fig. 4). Although Peru rebuffed the Ecuadorian 
forces militarily with loss of life on both sides, border problems 
with Ecuador have continued to surface from time to time. By 
mid- 1992, however, the proportion of Peruvian forces deployed 
in the border areas had declined to 66 percent of personnel. 

The Peruvian Police Forces (Fuerzas Policiales — FF.PP.) faced 
new and unexpected challenges in the 1980s, chief among them 
the insurgencies, the substantial and increasing drug production 
and trafficking, and the rapid deterioration of public order, with 
its attendant increase in criminal activity. The political violence 



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Peru: A Country Study 



claimed 1 ,464 victims among police and military forces through 
1990; most occurred between 1985 and 1990, when there were 794 
police deaths and 492 military deaths. The excessive force used 
to quell coordinated SL prisoner riots in El Fronton, Lurigancho, 
and Santa Barbara prisons in the Lima area in June 1986, with 
close to 300 deaths among the inmates, contributed to a crisis of 
confidence among the police and military services. That crisis was 
one of the factors in the decision of President Alan Garcia Perez 
(1985-90) to combine the EP, MGP, and FAP into a single Ministry 
of Defense; to coordinate the intelligence- gathering efforts of hitherto 
separate agencies; and to join the various police forces into the Na- 
tional Police (Policfa Nacional — PN). Because Peru grew between 
60 percent and 70 percent of all the coca leaf used worldwide in 
the manufacture of cocaine, the United States government provided 
increasing support to the police forces during the 1980s to assist in 
the effort to reduce drug production and trafficking. Deteriorating 
economic conditions during most of the 1 980s undoubtedly contribu- 
ted to the escalation of criminal activity (almost 3 percent of Peru's 
population was arrested for various crimes between 1985 and 1988). 

For Peru's military and police forces, the most serious continu- 
ing national security challenge was the domestic insurgency, in 
which the SL accounted for over 80 percent of the 9,184 terrorist 
incidents from 1985 through 1990 and the MRTA for most of the 
rest. The political violence between 1980 and the end of 1990 
claimed about 18,000 lives by the most conservative calculation 
and property damage of US$18 billion, almost half of Peru's 1990 
GNP in current dollars. Peru's accelerating economic deteriora- 
tion between 1988 and 1990 exacerbated the national security 
problem among the increasingly impoverished population and 
sharply reduced the resources available to the military and police 
to deal with this mounting challenge. Although Peru entered the 
1990s confronted by its worst national security crisis since the War 
of the Pacific over 100 years ago, by late 1992 it did not appear 
to be in danger of imminent collapse. The capture of SL founder 
Abimael Guzman Reynoso in September 1992 gave the beleaguered 
government a major victory, but did not presage the end of the 
political violence. 

The Armed Forces in Society and Politics 

Changing Role over Time: Preconquest 

Military establishments have played a significant role in the 
different societies and polities that have operated in Peru over the 



264 



Workers repairing a military section in Machupicchu 
Courtesy Inter-American Development Bank 

centuries. Before the Incas gained prominence in the region in the 
fifteenth century, hundreds of native American groups controlled 
small areas of the coastal valleys, the small fertile intermontane 
plains of the highlands, and the banks of the jungle rivers. Armed 
conflict was an integral part of society to resolve disputes among 
groups or to deal with issues of territorial expansion. Hundreds 
of years later, local folk dances and ceremonies continued to por- 
tray many of these pre-Incan battles. The Quechua- speaking Incas 
were, for the thirteenth and fourteenth centuries at least, one more 
of these many native groups based in the Cusco (Cuzco) Valley 
of the south-central Andes. During the fifteenth century, however, 
the Incas embarked on a major campaign of conquest by military 
force, which resulted by the end of the century in the hemisphere's 
most extensive empire (see The Incas, ch. 1). Conscription provided 
the resources for initial conquest and for the mita (see Glossary) 
system to construct public works — roads, granaries, rest stations, 
and forts. This infrastructure allowed for consolidation of these rapid 
advances. The latter were aided by several devices: the reeduca- 
tion in Cusco of conquered nobility and their return to their com- 
munities; the stationing of lesser Inca nobility and military 
detachments in newly acquired territories; forced resettlement of 
obstreperous groups and communities to areas where they would 



265 



Peru: A Country Study 



pose less of a risk; and inculcation of a common language (Quechua), 
government organization, tribute system, and religious hierarchy 
(see The Incas, ch. 1). 

Colonial Period 

Although the Spanish were able to impose effective control over 
much of the region by 1537, the conquerors soon fell to fighting 
among themselves over the spoils of their success. Order under the 
Spanish viceroys was gradually established and extended, but not 
without regular and persistent challenges at the local or regional 
level from dissident indigenous groups, often in the name of the 
Incas. Because of the economic importance of Peru to the crown, 
second only to Mexico, there was a larger Spanish military presence 
here than in the rest of Spain's New World empire. Even so, until 
the colonial reforms of 1764 by the Bourbon dynasty in Spain, the 
military garrisons were small and stationed in the cities. Many 
career officers and troops served their tours of duty in these Peru- 
vian cities and then returned to Spain. Landowners were left to 
their own devices for protecting their local interests, so they raised 
private militias as necessary. Military forces during the last sixty 
years of Spanish rule were more regularized and institutionalized 
into three categories: Spanish regiments on temporary service, 
others on permanent colonial service, and colonial militias. 

The independence movements that began to sweep Latin Ameri- 
ca in 1810 during Napoleon Bonaparte's occupation of Spain and 
his brother Joseph's brief reign were slow to reach Peru, but they 
inevitably arrived. New regiments raised locally to protect the 
viceroyalty initially defeated independence forces attempting to 
liberate the area from outside, but eventually played an important 
role in ousting the Spaniards themselves. However, the main impe- 
tus for independence came from Simon Bolivar Palacios and Jose 
de San Martin from the viceroyalties of New Granada and Rio 
de la Plata (River Plate), respectively. It was San Martin who 
brought his army to Peru from Chile and took Lima after refusing 
to negotiate with the viceroy, declaring independence on July 28, 
1821, and making himself military dictator. He used this position 
to advance the cause of independence and to prepare militarily for 
the final campaigns against the Spanish. This preparation included 
establishment of a series of military units, the first of which, called 
the Peruvian Legion, was formed on August 18, 1821 . In addition, 
he formed Los Montoneros, a mounted guerrilla force, to harass 
the royalists and shield the operations of the republican regulars. 

San Martin resigned and went into exile in France before full 
independence was secure, when he realized that he and Bolivar 



266 



National Security 



would not be able to cooperate. Nevertheless, San Martin's earlier 
organizational and training efforts earned him the sobriquet of pro- 
tector of Peruvian independence and founder of the EP. As San 
Martin had expected, Bolivar went on to win the Battie of Junin 
in August 1824, with significant help from the forces that San Mar- 
tin had prepared. These Peruvian units also made important con- 
tributions to the final battle for independence at Ayacucho on 
December 9, 1824, under the command of General Antonio Jose 
de Sucre Alcala (see also Independence Imposed from Without, 
1808-24, ch. 1). 

Postindependence: Military Defeat and Nation-Building 

The military's role in Peruvian affairs during most of the 
nineteenth century was a large one, owing both to the difficulties 
of building a domestic political consensus and significant foreign 
military threats. However, until the establishment of the army's 
Military Academy (Escuela Militar) in Lima's southern district of 
Chorrillos in 1896, Peru's armed forces tended to be more the per- 
sonal, noncareer armies of local and regional caudillos than a true 
national and professional force. Disputes over boundary and 
sovereignty issues provoked conflicts between Peru and Colombia 
(1828), Chile (1836-39), and Bolivia (1841), all with outcomes un- 
favorable to Peruvian interests and objectives. Domestically, mili- 
tary leaders occupied the presidency almost continuously from 1821 
to 1872, when the first elected civilian president, Manuel Pardo 
(1872-76), took office. The most successful of Peru's early mili- 
tary presidents, General Marshal Ramon Castilla (1845-51, 
1854-62), brought some degree of stability and order and a more 
disciplined military force. 

Castilla' s force was successful in a brief border conflict with Ec- 
uador and a naval blockade of that country in 1859, as well as in 
a more serious attempt by Spain to reassert its influence in Peru, 
Ecuador, and Chile in the mid- 1860s. Spain had not yet recog- 
nized Peru's independence, and its naval forces blockaded Peru- 
vian ports and occupied the economically vital Chincha Islands off 
the Peruvian coast in April 1864. These islands held rich deposits 
of guano, which became a Peruvian government monopoly that 
was largely responsible for Peru's growing prosperity in the 1850s 
and 1860s. When the Spanish fleet attacked Callao on May 2, 1866, 
Peruvian forces repulsed the invaders in a significant military vic- 
tory and brought about the lifting of the Spanish blockade along 
with the withdrawal of Spanish ships. This defeat ended Spain's 
last attempt to regain dominance in its former colonies. Extension 
of diplomatic recognition was to follow, but not until 1879. 



267 



Peru: A Country Study 



Peru's military preparedness did not keep pace with its increas- 
ing economic prosperity in the 1870s. President Pardo reduced mili- 
tary expenditures sharply as part of his Civilista Party's (Partido 
Civilista — PC) policy of trying to downgrade the historically 
dominant role of the armed forces. His elected successor, General 
Mariano Ignacio Prado (1865-67, 1876-79), found his military op- 
tions limited indeed when he attempted to deal with the growing 
problem of Chilean investment and ownership of the nitrate work- 
ings in Peru's arid, southernmost province of Tarapaca and, at 
the same time, with Chilean military threats against Bolivia to pro- 
tect its equally significant nitrate investments in Bolivia's coastal 
province of Antofagasta. 

Despite its discouraging military options, Peru felt obliged to 
honor its secret treaty obligations with Bolivia when Chile declared 
war on Bolivia on April 5, 1879. Thus ensued the War of the Pa- 
cific, a military, political, and economic disaster unprecedented 
in Peruvian history. Although Bolivia resigned itself to defeat within 
months and gave up its coast to Chile, Peru fought on. Peruvian 
naval forces were soon overwhelmed, even though Admiral Miguel 
Grau, aboard the iron-clad monitor Hudscar, acquitted his outclassed 
forces brilliantly in defeat and death (to become a Peruvian na- 
tional hero after whom the cruiser Almirante Grau of today's Peru- 
vian Navy is named). Chile's army advanced northward to occupy 
much of southern Peru, including Iquique in 1879, Arica in 1880, 
and although slowed and harassed by the courageous actions of 
General Andres Avelino Caceres and his troops, began a more than 
two-year occupation of Lima in January 1881. By the Treaty of 
Ancon of October 1883, Peru accepted defeat, giving up all of 
Tarapaca Province (which included Iquique) and agreeing to 
Chilean occupation of Tacna and Arica for ten years, until a pleb- 
iscite was to be held (see fig. 3). (This provision was not honored 
and was the source of much bitterness between Chile and Peru be- 
fore a solution was reached in 1929 with United States arbitration, 
giving Tacna back to Peru and awarding Arica to Chile.) Chilean 
forces finally withdrew from Lima in August 1884 (see The War 
of the Pacific, 1879-83, ch. 1). 

Guardian of the New Liberal Elite 

Peru was left prostrate as a result of the War of the Pacific. To 
pay war debts of over US$150 million, it gave up its income from 
guano to British creditors, along with its railroads (for sixty- six 
years) and a great tract of Peruvian jungle. Most of the country's 
economic elite was ruined financially. The government became one 
of the smallest in Latin America in terms of revenues, and the stage 



268 



National Security 



was set for an attempt at nation-building. Military leadership 
returned to the presidency for a time, vested in General Caceres 
(1886-90, 1894-95) and Colonel Remigio Morales Bermudez 
(1890-94), and the capability and morale of the armed forces be- 
gan to be restored. However, much of the credit for the creation 
of Peru's modern professional military goes to civilian president 
Jose Nicolas de Pierola (1895-99). Under his leadership, conscrip- 
tion was initiated, a French military mission was invited to train 
Peruvian counterparts, and the Military Academy at Chorrillos 
was established. 

Peru's one extended period of civilian rule (1895-1919), with 
regular national and municipal elections, had begun with elected 
governments, except for one brief coup period in 1914-15. If the 
civilian dictatorship of Augusto B. Legufa y Salcedo (1919-30), 
brought on by his election followed by a self-coup, is included, 
then the period of civilian rule extended to 1930. Elected or not, 
these civilian governments represented the newly emerging and 
consolidating liberal elite. This elite was protected by Peru's armed 
forces as long as it provided the resources the military believed it 
needed. This partnership, although sometimes an uneasy one, con- 
tinued under civilian governments (1939-45, 1956-62) or military 
rule (1930-39, 1948-56) almost continuously until the 1960s. 

For well over half a century, the FF. AA. viewed with suspicion 
political parties organized from the middle or lower classes. The 
Democratic Party's 1912 presidential victory by populist Guiller- 
mo Billinghurst provoked a coup two years later. A far more seri- 
ous concern arose in 1930 and after, with the challenge of the 
avowedly reformist American Popular Revolutionary Alliance 
(Alianza Popular Revolucionaria Americana — APRA) party. 
APRA emerged publicly in the aftermath of the 1930 coup over- 
throwing the Legma oncenio, or eleven-year rule. The coup occurred 
as the Great Depression was ending the previous foreign investment- 
and export-led growth years, and was led by Colonel Luis M. San- 
chez Cerro, Arequipa garrison commander. Sanchez Cerro then 
headed the 1930-31 military junta and ran for president in the 1931 
elections. APRA mounted a surprisingly strong challenge but lost, 
claimed fraud, and provoked a strong mass protest. 

On July 7, 1932, in an atmosphere of tension, APRA militants 
confronted an army garrison in Trujillo, the north coastal strong- 
hold of the party, and killed about sixty officers after they had 
surrendered and had been disarmed. Army reinforcements soon 
carried out massive reprisals in the city in which at least 1,000 
APRA militants and sympathizers were also killed. This event 



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Peru: A Country Study 



poisoned relations between the army and APRA for over thirty 
years and was a major factor in postponing the advent of sustained 
civilian rule in Peru. Sanchez Cerro's assassination in 1933 by a 
young APRA militant only exacerbated the hostility. APRA was 
not allowed to run openly for election again until 1962; the mili- 
tary's fear of increased APRA influence in the executive branch 
through a pact with the conservative National Odriist Union (Union 
Nacional Odrifsta — UNO) was a major factor in its July 1962 coup, 
which followed an indecisive election. 

Reformer and Agent of Change 

If hostility to APRA extended the FF.AA.'s role as guardian of 
the liberal elite, it also combined with a number of other develop- 
ments to move the military in the 1960s in the direction of reform- 
er and agent of change. United States military assistance during 
and after World War II, which contributed to modernization and 
professionalization and encouraged such new activities as civic ac- 
tion, was one factor. A second factor was the establishment of a 
specialized advanced military officer training center in 1950 that 
slowly made officers more aware of Peru's own national reality. 
The Advanced Military Studies Center (Centro de Altos Estudios 
Militares — CAEM) in Lima offered an annual concentrated pro- 
gram of study to selected officers and a few civilian government 
counterparts that was largely devoted to important social, politi- 
cal, and economic issues. A third element was the emergence in 
the 1956 elections of a non-APRA civilian reformist political al- 
ternative, Fernando Belaunde Terry's Popular Action (Accion 
Popular — AP) party, as APRA moved right in its attempt to gain 
political power. A fourth important influence on changing mili- 
tary perspectives was the brief rural insurgency in 1962-63 and 
again in 1965, which helped the military appreciate the potential 
future costs of continued government failure to respond to local 
needs and demands in a timely fashion. The armed forces' aware- 
ness of Peru's external dependency was heightened by two deci- 
sions by the United States: first, the United States government's 
unwillingness to sell Northrop F5 jets to Peru in 1967 and, second, 
its involvement on an ongoing basis in the 1960s with the Interna- 
tional Petroleum Company (IPC) negotiations with Peru over na- 
tionalization. 

When the first elected government of Belaunde (1963-68), which 
the military supported and helped make possible during its junta 
(1962-63), stumbled in its reformist efforts and mismanaged the 
IPC nationalization, the stage was set for the October 3, 1968, 
coup by the armed forces that had widespread popular support. 



270 



French AMX-13 light tank is paraded on Lima's Avenida Brasil, 1967. 
A women's unit of the armed forces parades on Avenida Brasil, 1967. 

Courtesy Paul L. Doughty 



271 



Peru: A Country Study 

For most of the military docenio (twelve-year rule) that was to fol- 
low (1968-80), Peru had a reformist military government. Led by 
the army, the FF.AA. became agents of change and state expan- 
sion based on a concept of security that they had gradually devel- 
oped, a concept that defined national defense in terms of national 
development. 

Even though the military regime under army General Juan Velas- 
co Alvarado (1968-75) and army General Francisco Morales Ber- 
mudez Cerrutti (1975-80) carried out a number of significant and 
far-reaching reforms, it ultimately failed. The military rulers tried 
to do too much too quickly and with insufficient resources. They 
overextended themselves with foreign loans when domestic capi- 
tal came up short. They also had more than their share of bad luck, 
from General Velasco's fatal illness to floods, droughts, and earth- 
quakes, to delays in getting oil exports underway. They preached 
full participation, but often imposed reforms made in Lima rather 
than being responsive to local circumstances and implemented them 
with central- government bureaucrats rather than local leaders. They 
stretched their military officers too thin over too many responsi- 
bilities and ran them to the point of exhaustion. 

Protector of Democracy 

Peru's military rulers did not try to destroy civilian political or- 
ganizations and even encouraged the development of the largely 
Marxist left, as an alternative to APRA. So when circumstances 
forced civilian political parties in 1977 and 1978 to consider the 
political future of Peru, they were ready to take responsibility 
through Constituent Assembly elections and the drafting of a new 
constitution. The military, exhausted by the most extended peri- 
od in its history in control of the government, were thus more than 
willing to assume a new role as protectors and defenders of their 
country's first mass democracy. Among other results, this period 
of the military in power had the effect of raising substantially the 
threshold of any future military intervention in Peru. 

The FF.AA., humbled but not humiliated as in some Latin 
American countries, certainly did not expect Peru's democracy to 
be challenged by insurgency. Nor did it expect to be forced to pro- 
tect this democracy by carrying out military operations involving 
large-scale loss of life among civilians, insurgents, and mili- 
tary/police forces alike, as well as substantial human rights viola- 
tions. Since 1980 formal or procedural democracy in Peru had been 
sustained, with the military's assistance, for a longer period than 
at any time since the first decade of the twentieth century. However, 
the gradual increase in provinces and departments declared to be 



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National Security 



under states of emergency and thus subject to military rather than 
civilian control substantially eroded the formal democratic reality. 
The 1987-91 economic crisis, in addition to its adverse effects on 
the population, also substantially reduced government funding of 
the armed forces, making the FF.AA.'s commitment to protect 
civilian democratic government increasingly uncertain. 

Changing Constitutional Basis 

The Peruvian military's relationship to the country's politics over 
the years was more related to the economic, social, and political 
issues of the moment and to internal armed forces dynamics than 
it was to specific legal dispositions. Constitutions themselves 
changed frequentiy, in keeping with the divergent and shifting views 
on the best way to build the Peruvian nation (see Constitutional 
Development, ch. 4). However, Peru's constitutional history be- 
came more regularized in the twentieth century with the constitu- 
tions of 1933 and 1979. Each reflected the circumstances prevailing 
at the time of its drafting, including those provisions related to the 
military. 

The constitution of 1933 was written in the aftermath of the 1930 
coup, the 1931 elections in which the upstart reformist APRA party 
had made such a strong showing, and the violence of the 1932 
Trujillo massacres. Members of the Constituent Assembly, now 
purged of APRA party members, were concerned about law and 
order and with protecting the political system from such mass-based 
parties as APRA. Article 213 of the constitution of 1933 clearly 
defined for the military a major role in national affairs: "The pur- 
pose of the armed forces is to secure the rights of the Republic, 
the fulfillment of the Constitution and the laws, and the preserva- 
tion of public order." Each of the subsequent military interven- 
tions in politics justified the action on the basis of Article 213: in 
1934, canceling elections; in 1936, annulling elections; in 1939, 
restricting eligible parties and candidates; and in 1948, 1962, and 
1968, instigating coups. The 1975 coup that gently removed the 
ailing General Velasco was not justified on the basis of Article 213. 

With the constitution of 1979, however, a very different situa- 
tion prevailed. The military had been in power for a number of 
years and most of the civilians elected to the Constituent Assem- 
bly in 1978 were concerned with how to get the FF.AA. out of 
government and how to keep them out in the future. The Constit- 
uent Assembly did codify the major reforms of the military regime, 
but members also noted in Article 273 and Article 278 that the role 
of the armed forces was to "guarantee the independence, 
sovereignty, and territorial integrity of the Republic. ' ' This mandate 



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Peru: A Country Study 



was much more limited than the mandate in the constitution of 
1933. The police forces were given responsibility for internal order. 
However, under unusual circumstances, as determined by the presi- 
dent, a temporary state of emergency or a state of siege could be 
declared in which the military would play an internal order role 
(Article 231). The president was commander in chief of the armed 
forces, with the authority to declare war or sign peace agreements 
with the authorization of Congress. 

Under the constitution of 1979, promotions to general officer 
had to be confirmed by the Senate and could fill only existing vacan- 
cies. Military personnel could not vote and could not run for pub- 
lic office until six months after resignation or retirement. Military 
and police were subject to the Code of Military Justice. These dis- 
positions were clearly designed to limit the political role of the mili- 
tary and to place them in a position subordinate to civilian authority. 

The principle of the supremacy of civilian authority established 
in the constitution of 1979 was compromised to a significant degree, 
however, by several subsequent decrees and laws passed in response 
to the unexpected development of the domestic insurgency in the 
1980s. The Law of Political-Military Commands of June 1985 es- 
tablished and legalized the operation of Political-Military Com- 
mands in the areas of the country declared to be in a state of 
emergency. Another was Decree Law 171, which stipulated that 
the military in the emergency areas were on active duty full-time 
and therefore could be tried only in military courts. Furthermore, 
although a state of emergency or a state of siege could be declared 
for a ninety-day period, these could be renewed indefinitely by 
presidential decree. As of late 1991, military personnel had the right 
to vote. 

Each of these dispositions limited in practice the primacy of the 
role of civilian authority set forth in the constitution 1979 and 
produced a potential scenario in which civil authority was formal 
and the real power was that of the military. With the steady ex- 
pansion in the number of provinces declared by the president to 
be in a state of emergency between 1982 and 1991, this possible 
scenario became more and more a reflection of reality. After Presi- 
dent Fujimori's autogolpe of April 1992 suspended Congress and 
the judiciary, decree laws defined terrorist acts as treason, provid- 
ed for trials of alleged terrorists in military courts, and increased 
maximum sentences on conviction from twenty years to life im- 
prisonment without parole. SL head Guzman and key lieutenants 
were tried, convicted, and sentenced to the maximum penalty in 
October 1992 under these decrees. 



274 



National Security 



Changing Foreign Military Missions and Impacts 

Like most other Latin American nations, Peru received substan- 
tial assistance from a number of countries over the years to help 
improve its military capability. Each foreign mission played an im- 
portant role during its time in Peru. The first missions were those 
of France, originally invited by President Nicolas de Pierola in 1896 
to help rebuild the armed forces, which had suffered a major defeat 
in the War of the Pacific and which were rent by internal conflict. 
Except for its withdrawal during World War I, the French army 
mission operated almost continuously in Peru until 1940, and was 
supplemented by a French naval mission (1905-12) and an air mis- 
sion (1919-21) as well. 

Perhaps the most significant foreign military presence, the French 
occupied most of the key command positions, established and then 
staffed the Military Academy in Chorrillos for over twenty years, 
and in 1904 set up and then directed the National War College 
(Escuela Superior de Guerra — ESG), also in Chorrillos. Many of 
the FF.AA.'s subsequent concerns — expansion of the country's ef- 
fective national territory, the educational role of conscription, data 
collection, the institution's civilizing mission, and the connection 
between national development and internal security — could be 
traced to the French missions. The origins of the modern profes- 
sional army of Peru could be found in the work of a succession 
of French officers and instructors, beginning in 1896 with Colonel 
Paul Clement, the first head of the French military mission. FF.AA. 
members trained by the French military mission were on active 
duty through the 1950s; even CAEM, founded in 1951, had its 
origins over thirty years earlier in a French mission recommenda- 
tion. The professional military that the French helped to create in 
Peru was an activist, interventionist one; it saw no conflict between 
military responsibilities and involvement in the country's economic, 
social, and political affairs. 

The United States military presence in Peru began with a naval 
mission in 1920. It operated almost continuously until the difficulties 
that led to the termination of all United States military missions 
by the Peruvian military government in 1969. A United States air 
mission first arrived in 1924, and another began to function in 1941. 
The United States Army mission worked continuously with its Peru- 
vian counterparts from 1946 to 1969. During the period from the 
1940s through the 1960s, when the United States military role was 
most extensive, and on into the 1970s, almost 7,000 Peruvian of- 
ficers and personnel were trained by the United States in programs 



275 



Peru: A Country Study 



lasting from a few weeks to four years. There were training centers 
in Peru, in the Canal Zone, and in the United States. United States 
training objectives included providing specialized technical com- 
petence, giving exposure to United States military approaches and 
relationships with civilian agencies, helping to professionalize in 
ways that would lead to less military intervention in politics, and 
assisting in giving the armed forces a development role, as in road- 
building or civic action. 

When increasingly nationalistic Peruvian military leaders felt that 
the United States role was in growing conflict with their view of 
Peru's national development goals, they chose in 1969 to expel the 
United States military missions. However, Peru continued to pur- 
chase some equipment from the United States, with attendant in- 
struction, and to send a small number of officers to the United States 
and its bases in the Canal Zone for training. Peru also accepted 
small United States military and paramilitary training units in Peru 
from the mid-1980s onward for short-term specialized instruction 
related to drug-trafficking interdiction. The February 1990 Car- 
tagena Agreement (or Andean Initiative — see Glossary) signed by 
the presidents of the United States and the Andean countries, along 
with the Peru-United States umbrella agreement on drug control 
and economic assistance of May 1991, envisioned substantially ex- 
panded United States economic and military assistance to Peru to 
help with the drug-trafficking and insurgency problems. Expanded 
military training assistance was approved by the United States Con- 
gress for 1992 as part of a US$30-million military assistance pack- 
age, but was suspended in April 1992 after President Fujimori's 
self-coup. 

Shorter-term foreign military advisers during the twentieth cen- 
tury included a German general from 1926 to 1930 and an Italian 
air mission from 1935 to 1940. Beginning in 1973, the EP and FAP 
developed a close relationship with the Soviet Union that included 
substantial military missions for both services. From the mid-1970s 
through the 1980s, some US$1.5 billion in Soviet equipment was 
purchased by Peru, more than from any other single country. From 
100 to 400 Peruvian military personnel from the EP and FAP were 
trained in the Soviet Union each year at the height of the relation- 
ship. In the mid-1980s, the Soviet permanent mission in Peru con- 
sisted of 650 personnel. Up to seventy-nine technicians at a time 
from Cuba's Antiaircraft Defense and Revolutionary Air Force 
served in Peru in the late 1970s to help with the preparation of 
Soviet equipment purchased by the FAP. The materiel and sup- 
port gave Peru significant opportunities to upgrade the EP and FAP 
at relatively low cost and on extremely favorable credit terms. 



276 



A United States Marine captain observes a Peruvian army lieutenant practice 

firing a grenade launcher, 1981. 
Courtesy United States Department of Defense 

Because of economic problems, repayment was largely in goods 
rather than cash. 

Peru was the only Latin American country outside of Cuba in 
which the Soviet Union had a significant military presence. In fact, 
in the mid-1980s there were more Soviet military advisers in Peru 
(150 to 200) than there were United States military advisers in all 
of Latin America. Although the ongoing Soviet-Peru military rela- 
tionship had been reduced substantially by early 1991 and Peruvi- 
an military authorities were interested in new arrangements with 
other countries, severe economic problems made these very difficult 
to work out. 

The impact of foreign military training missions on the FF.AA. 
over the years was significant, even decisive at times. The most 
important contributions were in the areas of establishing training 
facilities, providing instruction in an array of military subjects both 
in Peru and abroad, building the technical capability of the mili- 
tary with training related to equipment purchases, and making each 
of the institutions of the armed forces more professional. In Peru, 
however, as in most Latin American countries, military profes- 
sionalization also better equipped the institution to become involved 
in politics when its leaders deemed that circumstances required in- 
tervention. Neither the French missions of 1896-1940, nor the 



277 



Peru: A Country Study 

United States missions of 1946-69 resulted in reduced Peruvian 
military intervention; the Soviet relationship originally developed 
while the Peruvian armed forces were in control of the government. 

What the Peruvian military tried to do for many years, usually 
with success, was to maintain diversity in both foreign missions 
and sources of equipment in order to retain as much independence 
as possible as an institution. Although this strategy worked in the 
1920s and 1930s, it was even more successful in the 1970s and early 
to mid-1980s. For example, of the more than US$1 billion in mili- 
tary equipment Peru obtained from 1974-78, some 63 percent came 
from the Soviet Union, 10 percent from the United States, 7 per- 
cent from France, 6 percent from the Federal Republic of Germa- 
ny (West Germany), 4 percent from Italy, 1 percent from Britain, 
and 9 percent from other countries. This pattern continued in the 
1980s, giving Peru the most diversified military in Latin America 
in terms of equipment, as well as making the country the largest 
single importer of arms in the region. One of the prices of greater 
independence with greater diversity, however, was the technical 
and logistical challenge of trying to mesh widely varied materiel 
into effective and efficient military operations. 

The Armed Forces 
Mission and Organization 

The constitution of 1979 gave the FF. AA. responsibility for pro- 
tecting the country and providing for its defense. The president 
was commander in chief, and the heads of the EP, MGP, and FAP 
were next in the chain of command. On April 1, 1987, President 
Garcia signed legislation that streamlined this chain of command 
by combining the ministries of war (army), navy, and air force 
into a single Ministry of Defense. Under the ministry's purview 
were each of the services and the Joint Command of the Armed 
Forces (Comando Conjunto de la Fuerzas Armadas — CCFA). The 
CCFA, dating from 1957, brought together the chiefs of staff of 
each service with a small group of assistants (colonels or navy cap- 
tains) to advise the president on military matters. It had a plan- 
ning rather than an operational function, reviewed national 
intelligence reports, and oversaw the CAEM. The CCFA head ro- 
tated each year among senior officers of the three services. 

The National Defense System (Sistema de Defensa Nacional — 
SDN) of 1980 created a National Defense Council (Consejo de 
Defensa Nacional — CDN) of eight voting members — four civilian, 
including the president, and four military, including the armed 
forces commanders. The council responded to specific issues related 



278 



National Security 



to national defense (see fig. 14). The CDN was also the body 
charged with responsibility for reviewing the plans to deal with the 
insurgency that would be implemented by the Political-Military 
Commands in provinces or departments declared to be in states 
of emergency. The National Defense Secretariat (Secretarfa de 
Defensa Nacional) served as the Ministry of Defense's planning, 
advisory, and doctrinal unit. Headed by a general or admiral in 
active or retired status, the secretariat relied on the CAEM for train- 
ing and doctrinal support. 

In July 1992, the Fujimori government approved the restruc- 
turing of the National Intelligence Service (Servicio de Inteligen- 
cia Nacional — SIN) with a view to strengthening national security. 
Under the decree-law, SIN is tasked with establishing intelligence 
and counterintelligence objectives, strategies, and plans, as well 
as managing and monitoring their implementation. The decree- 
law expanded the scope of intelligence services to encompass po- 
litics, the armed forces, the economy, and "psychosociology. " It 
also established the ministerial-level SIN as part of the SDN. Decree 
746, issued on November 12, 1991, but repealed by Congress, 
would have had SIN answerable to the president and given it 
supremacy over the police and armed forces, as well as overall 
responsibility for counterinsurgency. Those powers apparently were 
enacted with the June 1992 restructuring. 

Training 

The Peruvian military long has had the reputation of being a 
well-trained force. For example, Peruvian army officers spent about 
30 percent of their active careers in school: four or five years in 
the military academy, one and one-half years in specialization school 
courses, two years in the ESG, one or two years in intelligence school 
or study abroad, a year at CAEM, and six months to a year in 
other special courses. Entrance to each service was based on high- 
ly competitive national examinations; advancement was also merit- 
based, and, in addition, course completion requirements had to 
be satisfied for promotion and for becoming a general officer. Each 
service also had technical training centers, such as the Army Ad- 
vanced Technical School (Escuela Superior Tecnica del Ejercito — 
ESTE) for preparing its noncommissioned skilled specialists, 
preponderantly volunteers rather than conscripts. Draftees received 
basic training and were encouraged to reenlist after their two-year 
obligation if their abilities indicated possibilities for advancement 
through technical training. As of May 1986, women did not serve 
as officers in any of the services, but there were a few volunteer 
enlisted servicewomen in the navy and a significant number of 



279 



Peru: A Country Study 



PRES 
(COMMANDI 


DENT 

ER IN CHIEF) 


NATI 
DEFENSE 


DNAL 
COUNCIL 



MUTARY 



NATIONAL 
INTELLIGENCE SERVICE 



CiVIUAN 



MINISTRY OF 
DEFENSE 



NATIONAL 
DEFENSE 
SECRETARIAT 



MINISTRY OF 
INTERIOR 



JOINT COMMAND 

OF THE 
ARMED FORCES 



ARMED FORCES 
INTELLIGENCE 
SERVICE 



INTERMINISTERIAL 
COMMITTEES 



NATIONAL 
POLICE 



POLITICAL- 
MILITARY 
COMMANDS 



REGIONAL 
GOVERNMENTS 



THEATERS OF 
OPERATION 



ARMY 




CONTROL 
COORDINATION 
INFORMATION FLOW 



Figure 14. Organization of the National Defense System, 1991 



280 



National Security 



enlisted female personnel in the air force (about 14 percent of total 
FAP personnel). 

Each service had its own training authority to supervise the educa- 
tional programs. The Peruvian Military Instruction Center (Cen- 
tro de Instruccion Militar Peruana — CIMP) oversaw the military 
high schools in Callao, Arequipa, Trujillo, and Chiclayo; the Mili- 
tary Academy; and the specialized branch schools — infantry, ar- 
tillery, armor, engineer, signal, ordnance, medical, veterinary, and 
paratroop. The CCFA had purview over the ESG. The Naval 
Studies Center (Centro de Estudios Navales — CEN) supervised the 
Naval Academy of Peru (Escuela Naval del Peru), the elite Naval 
War College (Escuela de Guerra Naval — EGN), and the Naval 
Technical and Training Center (Centro de Instruccion Tecnica y 
Entrenamiento Naval — CITEN), all located in Callao. The navy 
and the Ministry of Transit and Communications had joint respon- 
sibility for the Merchant Marine Academy. The Aeronautical In- 
struction Center Command oversaw the Peruvian Air Force 
Academy (Escuela de Oficiales de la Fuerza Aerea del Peru — 
EOFAP), Air University, and the Air Technical Training School. 

Competitive examinations, strict physical and health require- 
ments, rigorous education and training, as well as promotion and 
advancement on the basis of proven performance combined to build 
a strong professional military institution in Peru. Officer recruit- 
ment and training were the backbone of the armed forces. In terms 
of social origins, the officer corps was derived primarily from the 
middle class, with the army somewhat more from the lower strata 
and from smaller communities in the provinces; 56 percent of army 
generals promoted between 1955 and 1965 were born in the high- 
lands or jungle. Both navy and air force personnel came more from 
the upper strata, even upper class, and from urban areas, particu- 
larly Lima; about 90 percent of naval officers and over 65 percent 
of air force officers fit this description. A large proportion of officers 
also came from military families; 59 percent of army officers promot- 
ed to colonel or general between 1961 and 1971 fit into this category. 
In addition, a significantly greater percentage of the most promi- 
nent military officers were of immigrant origin than was the case 
in the general population. Among cabinet ministers of the Velas- 
co Alvarado military government, 31 percent from the army, 23 
percent from the navy, and 64 from the air force were also of im- 
migrant origin. 

Among the entrance requirements of the service academies, only 
the EP imposed a geographical distribution stipulation; 20 percent 
of each entering class had to be "from" (defined as where the ap- 
plicant attended the fifth year of secondary school) the northern 



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Peru: A Country Study 



departments, 50 percent from the north-central departments, 25 
percent from south-central and south departments, and 5 percent 
from the eastern and northern jungle departments. These social 
and geographical distinctions tended to be reduced significantly 
within the military by each service's extensive and rigorous training. 

The one significant training opportunity that brought together 
representatives of each service, the police forces, and civilians was 
the CAEM. Within two or three years of its founding in 1950, the 
CAEM became a highly sought-after appointment. Its year-long 
National Defense Course considered social, economic, and politi- 
cal themes, as well as their strategic and military relevance. There 
were about forty graduates each year from the National Defense 
Course, taught by leading military and civilian professors, as well 
as by distinguished foreign visitors. Of the 1951-71 classes, 46 per- 
cent of students were army officers, 9 percent navy, 8 percent air 
force, 7 percent police, and 30 percent civilian. Many students went 
on to play significant roles in government and in their respective 
services. Of officers promoted to general or admiral between 1965 
and 1971, 80 percent in the army, 46 percent navy, and 33 per- 
cent air force had attended this National Defense Course. Thir- 
teen of the first nineteen cabinet ministers in the 1968-80 military 
government were CAEM graduates, although there has been some 
debate over the actual impact of the CAEM on the reformist orien- 
tation of this regime and on the military more generally. 

Army 

The EP was the largest of the military services in 1992, with about 
75,000 total personnel — some 8,000 officers and 52,000 conscripts, 
with the balance technicians and NCOs. However, it grew by less 
than the other services during the 1980s — only by about 15 per- 
cent, after almost doubling in size during the 1970s. 

Most of the army's manpower, as well as some of the navy's 
and air force's, has been provided by two-year conscripts. Although 
all male citizens between the ages of twenty and twenty-five were 
liable for military training and compulsory military service, a selec- 
tive draft system was used in practice. On completion of their two- 
year service, conscripts remained in the Army Reserve (Reserva), 
without compensation, for ten years. Then they passed to a second- 
line reserve, the National Guard (Guardia Nacional). The Army 
Reserve was formed by men between eighteen and fifty years of 
age and women between eighteen and forty-five years of age who 
do not serve in the active forces. 

In contrast with the navy and FAP, no women served in army 
ranks. By law, women were required to register for obligatory 



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National Security 



military service in one of the three armed forces and could be called 
up between the ages of eighteen and forty-five for two years. As 
of 1991, women had never been called up. In the army, women 
served only in civilian capacities, working as secretaries, clerks, 
and nurses. The view that it would be very difficult to integrate 
women into regular military service, including combat roles, con- 
tinued to prevail in the EP in 1992. 

Since the late 1920s, combat units have been organized on the 
tactical formation of the light division {division ligera), made up of 
four infantry battalions and an artillery group, with the possibility 
of adding as needed a cavalry regiment or an engineer battalion 
or both. In 1991 there were a total of twelve light divisions, in- 
cluding one airborne, one jungle operations, two armored, one 
cavalry, six motorized light infantry, and one special forces divi- 
sion. The divisions are the equivalent in size of a United States 
brigade. 

The infantry, armored, and engineer forces were organized as 
of 1990 into some thirty-six battalions, including three comman- 
do and one paratrooper battalion, plus some nineteen groups. The 
cavalry was formed into eight regiments, including the horse regi- 
ment that made up the presidential escort and two armored regi- 
ments in the Tacna Detachment (Third Military Region). The 
artillery was made up of fourteen groups, including four anti- 
aircraft units, an airborne group, and two jungle units. There were 
also two tank battalions and seven engineer battalions, including 
three armored, three combat, and one construction. 

The five military regions originally determined by the French 
military mission at the start of the twentieth century continued to 
comprise the geographic areas of deployment of the EP. The First 
Military Region, headquartered in the city of Piura, consisted of 
the northwestern departments of Tumbes, Piura, Lambayeque, 
Cajamarca, and Amazonas (see fig. 1). The Lima-based Second 
Military Region comprised the north-central and coastal depart- 
ments of La Libertad, Ancash, Lima, lea, and Huancavelica, as 
well as the constitutional province of Callao. The Third Military 
Region, headquartered in Arequipa, included the southwestern 
coastal-highland departments of Arequipa, Moquegua, and Tac- 
na. The Fourth Military Region, headquartered in Cusco, covered 
the entire central and southern spine of the Andes and its slopes 
and foothills toward the jungles of the east and comprised the depart- 
ments of San Martin, Huanuco, Junin, Pasco, Ayacucho, Puno, 
Apurimac, and the largely jungle department of Madre de Dios. 
The Fifth Military Region, headquartered in Peru's largest Amazon 



283 



Peru: A Country Study 



city of Iquitos, covered the jungle departments of Loreto and 
Ucayali. Each region was normally commanded by a major general. 

The general staff of the EP had four sections — personnel, intel- 
ligence, operations, and logistics — directed by an assistant chief 
of staff. Additional special staffs, whose directors reported to the 
chief of staff, included engineering, communications, ordnance, 
finance, medical, research and development, reserves, premilitary 
training, and the chaplaincy. 

Beginning in 1973, after approaching the United States, France, 
and Israel without success, the EP negotiated agreements to pur- 
chase substantial quantities of arms and equipment from the Soviet 
Union. Price and credit terms were deemed to be far more favora- 
ble than any arrangements that could be made with other poten- 
tial suppliers. With its Soviet T-54, T-55, and T-62 tanks, as well 
as its French AMX-13 light tanks, Peru had a significant armored 
capability, concentrated largely in the two tank battalions in the 
Third Military Region (see table 24, Appendix). 

Peru produced some small arms and ammunition, but most were 
purchased from several foreign suppliers, including the United 
States. The diverse sources of Peruvian equipment posed challeng- 
ing logistical problems, in addition to reported difficulties with main- 
tenance on some Soviet equipment, especially tanks and helicopters. 

Navy 

As of 1992, the MGP had a total complement of 22,000 person- 
nel, including 2,000 officers, 10,000 conscripts, and 3,000 marines. 
Volunteers included at least fifty enlisted servicewomen in the navy, 
some with ranks and regular two-year service duties, others with 
one-day-a-week and Saturday duties for one year. The former could 
reenlist for additional two-year periods, the latter for one. They 
performed mostly administrative tasks. 

The number of naval personnel increased by more than 100 per- 
cent (and the marines by 150 percent) during the 1980s, more rapid- 
ly than did any other service (see table 25, Appendix). In large 
measure, the increase had resulted from the completion during the 
decade of a major modernization program begun during the mili- 
tary government of 1968-80. By the end of the 1980s, the MGP 
had replaced the Chilean navy as the third largest in Latin Ameri- 
ca, behind only Brazil and Argentina. 

Reporting directly to the commander in chief of the navy were 
the chief of staff and the commanders of the Pacific Naval Force, 
Amazon River Force, Callao Naval Base, and the Naval Studies 
Center (Centro de Estudios Navales — CEN). The two key com- 
ponents were the Pacific Naval Force and the Amazon River Force. 



284 




A Peruvian special warfare unit marches in downtown Lima during 

Operation Unitas XXV, 1984. 
Courtesy United States Department of Defense 



By far the most important was the Pacific fleet, with nine subma- 
rines, two cruisers, six destroyers, four missile frigates, and six mis- 
sile attack craft (see table 26, Appendix). Most were based at the 
Callao Naval Base, with the submarines at San Lorenzo Island; 
there was also a small base at Talara in the northwestern depart- 
ment of Piura. The Amazon River Force had four river gunboats 
and some twenty small craft, most at the main base at Iquitos, with 
a subsidiary facility at Madre de Dios. Additional components in- 
cluded the Lake Titicaca Patrol Force, with about a dozen small 
patrol boats, based at Puno; and the Naval Air Service with about 
sixty aircraft between Jorge Chavez International Airport at Lima 
(fixed wing) and the Callao Naval Base (a helicopter squadron and 
a training unit). The greatly expanded Marine Infantry of Peru 
(Infantena de Marina del Peru — Imap) included an amphibious 
brigade and local security units with two transports (one used as 
a school ship), four tank-landing ships, and about forty Brazilian 
Chaimite armored personnel carriers. Since 1982 Imap detachments 
have been deployed, under army command, in counterinsurgen- 
cy capacities in Ayacucho and Huancavelica departments. 

Nine submarines gave Peru the largest underwater fleet in Latin 
America. Six of the submarines that entered into service between 



285 



Peru: A Country Study 



1974 and 1977 were Type 209 (Casma class), built for Peru in West 
Germany. All were conventionally powered with eight twenty-one- 
inch torpedo tubes and had a complement of five officers and 
twenty-six technicians and enlisted personnel. The other three sub- 
marines were former United States Navy craft that had been refit- 
ted and transferred to the Peruvian Navy. They were newer 
modified Mackerel class (Dos de Mayo class), launched between 
1953 and 1957, with six twenty-one-inch torpedo tubes and a crew 
of forty. 

The two cruisers were the former Netherlands De Ruyter and De 
Zeven Provincien, purchased in 1973 and 1976 and renamed the 
Almirante Grau and the Aguirre, respectively. The Almirante Grau was 
reconditioned in the late 1980s to include eight surface-to-surface 
missiles (Otomats), in addition to its eight 152-mm surface guns 
and 5 7 -mm and 40-mm antiaircraft guns. The Aguirre carried the 
same guns (four 152-mm) but had been modified for a hangar and 
flight deck for three Sea King helicopters equipped with Exocet 
missiles. Each cruiser had a crew of 953, including forty-nine 
officers. 

Peru's six destroyers were all older ships from the 1940s and early 
1950s. The two former British destroyers, renamed Ferre and Pala- 
cios, had been refitted to accommodate eight Exocet missile launch- 
ers and a helicopter deck in addition to their regular armament 
of six 1 14-mm guns and two 40-mm antiaircraft guns. The other 
four destroyers were those remaining in active service of the eight 
purchased from the Netherlands between 1978 and 1982 (the other 
four were cannibalized for parts); their armament included four 
120-mm guns. 

Contrasting with these older, even antiquated former Dutch de- 
stroyers were the four modern Lupo-type frigates and six fast mis- 
sile attack craft. Two of the frigates, Meliton Carvajal and Manuel 
Villavicencio, were completed in Italy in 1979; the other two sister 
ships were constructed at the Callao Naval Base under license to 
the Maritime Industrial Services (Servicios Industrials de la 
Marina — Sima), a public company with operational centers located 
at Callao, Chimbote, and Iquitos, and launched in the early 1980s. 
Equipment and armament for each included an Agusta Bell 212 
helicopter, eight Otomats, two batteries of surface-to-air missiles, 
and a 127-mm gun. The six missile attack craft, each equipped 
with four Exocet missiles, were built in France for Peru and com- 
pleted in 1980 and 1981. These ships were the most important com- 
ponent of Peru's surface navy because of their speed, versatility, 
and relatively recent construction. 



286 



National Security 



Air Force 

The FAP had a total personnel strength of about 15,000 in 1990, 
including some 7,000 conscripts, with 116 combat aircraft and 24 
armed helicopters. These figures compared with some 10,000 air 
force personnel in 1980 and 138 combat aircraft. Of Peru's three 
services, only the FAP had made a significant commitment to in- 
clude women volunteers in regular enlisted service. As of May 1986, 
there were 2,100 women in the ranks, including 20 senior airwom- 
en, 60 airwomen first class, 300 airwomen, and 1,720 airwomen 
basic. Basic training courses were the same as those provided to 
men. Most women served in administrative positions, including 
secretarial, teletype, nursing, meteorology, and supply assistance. 

During the 1968-80 military government, the FAP, like the 
MGP, underwent a substantial modernization that continued into 
the elected civilian administrations of the 1980s. Unlike what was 
true in the navy, however, much of the modernization involved 
the acquisition of Soviet equipment, the extension of a long-standing 
air force policy of diversifying material sources rather than rely- 
ing primarily on a single country. 

In addition, the FAP made substantial purchases of planes and 
helicopters from other countries. Although this remarkable diver- 
sity posed major logistical and maintenance challenges, by the late 
1980s Peru had the third largest air force in Latin America and 
the most advanced equipment of them all (see table 27, Appendix). 

The FAP entered into an agreement with Italy's Macchi Avia- 
tion Company (Aeronautica Macchi — Aermacchi) in 1980 to assem- 
ble in Peru sixty-six MB-339 AB trainers and MB-339K light attack 
planes, with the wings, rear fuselage, and tail unit manufactured 
in Peru. Construction began in November 1981 of an Aeronautics 
Industry Public Enterprise (Empresa Publica de la Industria 
Aeronautica — Indaer-Peru) factory at Collique with Aermacchi as- 
sistance, but financial problems forced its cancellation in late 1984. 

The FAP commander, with headquarters in Lima, was respon- 
sible to the minister of defense and oversaw a service divided, as 
of 1990, into some nine groups and twenty- two squadrons across 
Peru's three air defense zones. The FAP's principal bases were at 
Iquitos in the north jungle; Talara, Piura, Chiclayo, and Trujillo 
on the north coast; Huanuco in the central highlands and Lima/Ca- 
llao, Las Palmas, and Pisco on the central coast; and La Joy a and 
Arequipa in the south. Secondary bases included Cajamarca in the 
north highlands; Ancon and Limatambo on the central coast; San 
Ramon, Ayacucho, and Cusco in the central and south-central high- 
lands; and Puerto Maldonado in the south jungle. 



287 



Peru: A Country Study 



The six groups with combat equipment were distributed among 
the major bases: Attack Group 7 (three squadrons of Cessnas) at 
Piura and Chiclayo; Bomber Group 9 (two squadrons of Canber- 
ras) at Pisco; Fighter Group 1 1 (including one squadron of Fitter- 
Js) at La Joya; Fighter Group 12 (two squadrons of Fitter-Fs) at 
Talara; and Fighter Group 13 (two squadrons of Mirages) at 
Chiclayo, with deployments to La Joya and elsewhere. The other 
combat group was Helicopter Group 3, which was based at Callao 
but deployed at various bases throughout the country, including 
an attack squadron, which as of 1990 was probably assigned to the 
army for counterinsurgency duty. 

FAP responsibilities during the 1980s also included increasing 
activities to support the government's effort to reduce drug traffick- 
ing, particularly illegal flights to Colombia from clandestine air strips 
in the north central region of the Upper Huallaga Valley. In addi- 
tion, the FAP continued to fulfill its long-standing mission of provid- 
ing air links to remote parts of Peru that lacked roads, particularly 
the eastern jungle areas. Transportation Group 42, based in Iqui- 
tos, operated the National Jungle Air Transport (Transportes Ae- 
reos Nacionales Selvaticos — TANS) service with C-47s, DHC-6s, 
and PC-6s. Transport Group 8 was based at Lima's Jorge Cha- 
vez International Airport to perform similar duties, as well as to ser- 
vice some of the military's own air supply and training needs, with 
L-100-20 Hercules, DHC-5s, AN-26s, AN-32s, Beech 99s, Queen 
Air 80s, and King Air 90s. The president's fleet, including a Fok- 
ker F28 and Falcon 20F, was also a part of Transportation Group 
8. Some of the helicopter squadrons were deployed at various bases 
to assist in such nonmilitary missions as the support of oil explora- 
tion activities, medivac, and sea-air rescue; others concentrated 
on military support activities, particularly against guerrilla opera- 
tions. Peru's location astride the Andes and its multiple ranges, 
with a jungle area comprising over half the national territory and 
a heavily populated coast largely cut off from the rest of the coun- 
try, required a substantial air force presence. The national airline, 
Air Transport Company of Peru (Empresa de Transporte Aereo 
del Peru — Aeroperu), was considered an auxiliary of FAP. 

Uniforms, Ranks, and Insignia 

The three services used a variety of uniforms for routine duties 
as well as for parade, fatigue, field, and shipboard duties. Colors 
were army khaki and army green, navy blue, and air force blue. 
Officers had an optional white uniform for summer wear in addi- 
tion to dress uniforms for ceremonies and formal occasions. 
Government-issue uniforms worn by enlisted personnel were made 



288 



National Security 



of less expensive material and were simpler in design than uniforms 
worn by officers. 

Army officer ranks up to the grade of colonel were the same as 
in the United States Army, that is, three company grades and three 
field grades (see fig. 15). The two general officer grades were equiva- 
lent to major general and lieutenant general in the United States 
system. Rank insignia, worn on shoulder boards or shirt collar, 
consisted of from one to six gold bars for second lieutenant through 
colonel and two and three miniature gold sunbursts for major gener- 
al and lieutenant general, respectively. Navy and air force officers 
had eight comparable ranks; insignia were worn on lower sleeves 
similar to the practice followed by the United States Navy. 

All services utilized several ranks of technicians between the com- 
missioned officer and NCO levels. These were highly trained 
specialists who in many respects could be compared to warrant 
officers in the United States services. Technicians — five levels in 
the army and the air force and four in the navy — were career per- 
sonnel who had been carefully screened for technical aptitude be- 
fore being accepted for special training. Selected from among 
conscripts and volunteers, those accepted usually had attained 
higher educational levels than the average conscript. 

In the navy, there were three petty officer ranks and two sea- 
man ranks, but the other two services had, in effect, two levels of 
NCOs: subofficers, and sergeants and corporals. Subofficers were 
generally those who had served an initial tour and decided to fol- 
low a military career; in the structure, they were comparable to 
the supergrades among United States enlisted personnel. The ser- 
geants and corporals were generally conscripts on their initial tour 
who had been selected for leadership traits (see fig. 16). 

The Military in the 1990s 

The armed forces entered the 1990s with a strong institutional 
tradition, excellent training at both the officer and technician lev- 
els, and substantially renovated and updated equipment and 
materiel in each service. However, the services faced major 
challenges that would have seemed almost inconceivable only a de- 
cade earlier when concerns revolved primarily around how to ef- 
fect an orderly transition back to civilian democratic rule and return 
to the barracks and bases after twelve years of military government. 

The most significant of these challenges from the standpoint of 
the military as an institution was Peru's severe economic crisis, 
particularly the 1988-90 hyperinflation. The 1990 estimated defense 
budget of US$245 million was less than half of 1989 estimated ex- 
penditures, which totaled US$544 million. In other words, defense 



289 



Peru: A Country Study 




290 



National Security 



SUBOFICIAL SUBOFICIAL 
SEGUNDO PRIMERO 

MASIIH FIRST SERGEANT COMMAND 
SIIKilANl SIMGIANI MAJOR SI HOI ANI MAJOR 


NO RANK NO RANK 

si nior cuir r 

MAS II RSI RGI ANI MAS II H SI RGI ANI 


TECNICO TECNICO 
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MASTER CHIEF 
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MASTER 
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TECNICO SEGUNDO 

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SEAMAN 


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ARMY 

U.S. RANK TITLE 


PERUVIAN RANK 

AIR FORCE 
(CONSCRIPTS) 

U.S. RANK TITLE 


PERUVIAN RANK 

AIR FORCE 
(CAREER) 

U.S. RANK TITLE 


PERUVIAN RANK 
NAVY 

U.S. RANK TITLE 



291 



Peru: A Country Study 

expenditures in 1990 dropped from 1.6 percent of gross domestic 
product (GDP— see Glossary), which was US$34.7 billion in 1989 
current dollars, to 0.7 percent of 1989 GDP. (This figure compared 
with 3.3 percent in 1969 and 5.7 percent in 1978.) Such a dramat- 
ic drop in available resources meant sharp cutbacks in every area 
of defense spending, from salaries to maintenance. Officers com- 
plained of having only about US$0.20 daily to feed each foot sol- 
dier in the field; soldiers were being paid less than US$10 a month 
in 1991. Some officers and technical personnel resigned because 
of the financial hardships (180 officers and 370 technicians between 
January 1 and June 7, 1991, in the army alone and about 400 navy 
officers, one-fifth of the entire active officer corps, from 1990 to 
mid- 1991). Finally in mid- 1991, both the army and navy temporar- 
ily halted acceptance of resignations or early retirement. With sal- 
aries sharply eroded to a fraction of their former levels as a result 
of the inflation (US$192 a month for a general before tax and pen- 
sion deductions in July 1991, compared with US$910 for his Boliv- 
ian counterpart) and the inability of the government to keep up 
with tax collections (less than 4 percent of GNP in 1990) such dis- 
couragement was not surprising. One Lima news magazine, St, 
noted that the situation had gotten so bad by 1991 that a janitor 
at Peru's Central Reserve Bank (Banco Central de Reservas — 
BCR, also known as Central Bank) earned twice the monthly sal- 
ary of a general. The government turned down the military's 1991 
request for US$279 million in an emergency supplemental budget 
allocation, approving just US$75 million. One disturbing indica- 
tor of the potentially dire consequences of this pattern of under- 
funding was the armed forces' readiness status, which measured 
the level of preparedness of the military against an ideal level. In 
1985 readiness status was determined to be 75 percent; in July 1990, 
it was only 30 percent. 

The other quite unanticipated and unwanted challenge was that 
posed by the guerrillas. The SL timed the start of its "people's 
war" to coincide with national elections in May 1980, calculating 
correctly that neither the outgoing military regime nor the incoming 
civilian government would be anxious to take it on or even willing 
to recognize a problem. The circumstances of returning to civilian 
rule and opening access to both local and national government by 
multiple parties of the Marxist left did not support the SL's own 
analysis at the time that worsening conditions were conducive to 
guerrilla war. Nevertheless, the SL's dogged pursuit of the peo- 
ple's war soon created conditions favorable to its continuance. 
Sabotage and destruction of infrastructure slowed economic growth 
and contributed to individual hardship. Selective assassination 



292 



National Security 



paralyzed many local governments and led to withdrawal of police, 
military, and rural development personnel (Peruvian and foreign), 
particularly in more remote rural areas. 

Military responses, beginning late in December 1982 in the 
region encompassing Ayacucho, Huancavelica, and Andahuaylas, 
slowed the SL's progress but also displaced the SL to other areas. 
The armed forces' detachments also intimidated many of the citizens 
whom they were supposed to protect, with hundreds of human rights 
violations recorded. Furthermore, over 500 military personnel at 
all levels and 1,000 police personnel lost their lives between 1982 
and 1990. Although the military's response to the insurgent 
challenge — first against the SL and later against the MRTA as 
well — often included important successes, the guerrilla problem was 
much more widespread at the end of the decade than it was at the 
beginning. 

The economic crisis fed the flames of the insurgency in at least 
four ways: it made daily existence much more precarious for the 
civilian population and thereby increased its susceptibility to the 
SL's revolutionary appeal; it reduced sharply the resources avail- 
able to the armed forces to combat the SL at the very moment they 
were most needed; it made military personnel more susceptible to 
corruption by drug traffickers; and it severely limited the state's 
capacity to provide the economic aid for development programs 
designed to address popular needs, particularly in the economic, 
social, and geographical periphery. Given this situation, new eco- 
nomic resources from abroad were viewed as crucial to keep mat- 
ters from deteriorating further. 

Peru successfully reinserted itself into the international finan- 
cial community with a US$2. 1 -billion negotiated debt-refinancing 
package in September-October 1991, along with several hundred 
million dollars in economic assistance from a support group of de- 
veloped countries, including the United States. For 1992 the United 
States Congress approved a US$95-million executive branch re- 
quest, including US$30 million in counternarcotics assistance. 
These resources were expected to help Peru achieve net economic 
growth in 1992 for the first time in five years. However, Fujimori's 
autogolpe of April 5, 1992, resulted in the temporary suspension of 
most of the funds, including all but humanitarian and counternar- 
cotics aid from the United States. The suspension postponed by 
at least a year Peru's domestic economic recovery. 

The substantial buildup and strengthening of the military's forces 
in the 1970s and 1980s gave it reserves from which to draw when 
forced to face both the economic and guerrilla challenges. However, 
much of the new capability of the FF.AA. was designed for more 



293 



Peru: A Country Study 



conventional purposes, such as border and ocean defense, and it 
was difficult if not impossible to adjust sufficiently to the insur- 
gency problem. In 1991 most of the equipment and over 80 per- 
cent of the military personnel remained positioned on the borders 
or at sea where they could do litde to affect the course of the insur- 
gency. Although the military had shifted more personnel into 
conflicted areas by May 1992, more than two-thirds of military 
personnel continued to be posted at border bases. 

Police Forces 

Peru's police forces (FF.PP.) date from the days of Simon Boli- 
var in 1825 but were formally organized as a responsibility of the 
central government in 1852, with the establishment of the Gen- 
darmerie. From this force, a Republican Guard (Guardia Republi- 
cana — GR) was created in 1919, with specified duties related to 
border patrol, prison security, and the protection of establishments 
of national importance. A reorganization was carried out in 1924 
under the aegis of a Spanish police mission; the new plan created 
the Civil Guard (Guardia Civil — GC) as the main national police 
force (the Republican Guard retained its specialized responsibili- 
ties) and a plainclothes investigating and forensic group known as 
the Investigative Police of Peru (Policia de Investigaciones de 
Peru — PIP). The constitution of 1979 designated the president of 
Peru as the head of the police forces and armed forces, but with 
administrative responsibility for all of the police continuing to be 
vested in the Ministry of Interior. 

After a number of problems in the mid-1980s, which included 
allegations of corruption, a large spate of human rights violations, 
and a massacre of inmates (mostly SL members) in Lima prisons 
in June 1986 after they had surrendered following a riot, Presi- 
dent Garcia initiated a reorganization of the police forces that result- 
ed in the creation of the new National Police (Policia Nacional — PN) 
on December 7, 1988. It encompassed the General Police (Policia 
General — PG, formerly the GC), the Security Police (Policia de 
Seguridad — PS, formerly the GR), and the Technical Police (Policia 
Tecnica — PT, formerly the PIP), all of which remained under the 
authority of the Ministry of Interior (see fig. 17). 

The multiple challenges faced by the police forces during the 
1980s included rising crime rates, work stoppages, attacks on public 
buildings and installations, drug trafficking, and a growing guer- 
rilla insurgency. These challenges contributed to a number of crises 
for the police (detailed later) but also to their expansion in person- 
nel from 46,755 in 1980 to 84,265 in 1986 and about 85,000 in 
1991 for the entire PN. By 1992 PN strength was reduced to 84,000. 



294 



National Security 



All personnel were recruited by voluntary enlistment. These figures 
included a small but indeterminate number of policewomen. Among 
the special duties policewomen performed were the staffing of a 
special police center set up in Lima in 1988 to provide assistance 
to abused spouses and children. In addition to the PN, Peruvian 
cities employed municipal police for minor duties in the city hall 
and other city buildings and for overseeing public markets. 

General Police 

The General Police (PG), formerly the Civil Guard and by far 
the largest of Peru's police forces (42,537 in 1986), were organized 
into fifty-nine commands (comandancias) . The commands were lo- 
cated throughout the country in five police regions whose bound- 
aries and headquarters were the same as the country's five military 
regions, with overall headquarters in Lima. The general staff was 
similar to the military's, and included sections for operations, train- 
ing, administration, personnel, legal affairs, public relations, and 
intelligence. As of 1989, commands were located in each of Peru's 
24 department capitals and in the constitutional province of Ca- 
llao, as well as in the largest of the 183 provincial capitals. Smaller 
police stations and posts operated in most of the other provincial 
capitals and in a significant portion, though by no means all, of 
the 2,016 district capitals. Detachments varied in size, depending 
primarily on population density, from a single police officer, to 
three or four commanded by a sergeant, to thirty or forty com- 
manded by a lieutenant; a department-level command included 
up to several hundred police and was headed by a colonel or a gener- 
al. Lima-appointed mayors and deputy mayors had some influence 
over local posts, but primarily chains of command went through 
police channels. Some commands had specialized duties, such as 
riot control, radio patrol, and traffic, and one guarded the presiden- 
tial palace. 

The PG instruction center, located at Chorrillos, included an 
officers school that provided a four-year curriculum to police cadets 
comparable to the service academy programs, a school for lieu- 
tenants preparing for the required examinations for promotion to 
captain, and training schools for enlisted officers — recruits, cor- 
porals, and sergeants. In the 1960s, the police received training 
support from the Public Safety Mission of the United States Agency 
for International Development (AID), and some officers attended 
the AID's International Police Academy in the United States dur- 
ing its years of operation (1963-74). AID support for the police 
was renewed in the 1980s in the Upper Huallaga Area Develop- 
ment Project and the Control and Reduction of Coca Cultivation 



295 



Peru: A Country Study 



PRESIDENT 
(COMMANDER IN CHIEF) 

I 

MINISTRY OF 
INTERIOR 

I 

INSPECTOR 
GENERAL 

I 

STAFF 
CHIEF 



COUNTER- 
SUBVERSIVE 
DIRECTORATE 



ANTIDRUGS 
DIRECTORATE 



SPECIAL 
OPERATIONS 
DIRECTORATE 



1ST REGION 




3D REGION 


(PIURA) 




(AREQUIPA) 



2D REGION 
(LIMA) 



4TH REGION 
(CUSCO) 



5TH REGION 
(IQUITOS) 





SECURITY 
POLICE 

(PS) 1 




TECHNICAL 
POLICE 

(PT) 2 




GENERAL 
POLICE 

(PG) 3 









1 r 



ROBBERY 




SINCHI 


DIVISION 




BATTALION 



HOMICIDE 
DIVISION 

1 

ANTIKIDNAPPING 
DIVISION 

\ 

COUNTER- 
TERRORISM DIVISION 
(DINCOTE) 4 



1 PS - - POLICIA DE SEGURIDAD 3 PG - - POLICIA GENERAL 

2 PT -- POLICIA TECNICA 4 DINCOTE- - DIRECClbN NACIONAL 

CONTRA EL TERRORISMO 



Source: Based on information from "Nuevo Esquema," Caretas [Lima], No. 1169, July 
22, 1991, 20. 



Figure 17. Organization of the National Police, 1991 



296 



National Security 



in the Upper Huallaga Project; the AID assistance was part of the 
United States government's effort to control coca production and 
cocaine-paste trafficking. Both projects were created in 1981, but 
passed from the Ministry of Agriculture to the Ministry of Interi- 
or in 1987. The United States Drug Enforcement Administration 
(DEA) also worked closely with the police to impede drug produc- 
tion and trafficking; a new base, Santa Lucia, completed in the 
Upper Huallaga Valley in 1989, gave the police and the DEA sig- 
nificantly greater local capability to directly confront the drug 
problem in the area. 

Because the reorganization of the police forces into the PN was 
not fully implemented by the Congress until 1987, the Ministry 
of Interior substantially reduced its training programs for new 
officers and enlisted personnel in the late 1980s by postponing the 
admission of an entire officer class and two enlisted classes. With 
normal retirements, losses to the insurgents, and the large num- 
ber of forced retirements ordered by President Garcia, a decline 
in police personnel occurred just as insurgency, crime, and drug 
trafficking were increasing. The first joint police officer class com- 
bining the PG, the PT, and the PS did not graduate until 1988. 
The 1988 class had 682 graduates, some 814 were scheduled to 
complete their studies in 1989, none in 1990, and about 600 in 1991 . 

To cover the growing shortage of trained enlisted personnel, the 
Ministry of Interior established a new National Police School (Es- 
cuela de Policia Nacional — EPN), with centers in Lima, Chiclayo, 
Arequipa, and Cusco and planned to open programs in Chimbote 
and Pucallpa as well. The eight-month training prepared some 
1,288 high school graduates who had already had some secondary 
school military orientation; there was a somewhat longer program 
for 1,618 recruits without high school diplomas. With its six loca- 
tions fully operational, the EPN was capable of providing up to 
5,500 graduates a year for the PN enlisted ranks beginning in 1989. 
As of mid-1991, however, police training remained inadequate, 
with courses ranging from three to nine months at most. 

The insurgency of the 1980s frequently targeted police stations 
for attack as part of a strategy of acquiring arms and equipment 
and of forcing the abandonment of smaller and more exposed posts, 
particularly in rural areas. Individual police were often targeted 
for the same reasons. From 1981 through 1990, at least 735 police 
of all ranks were killed at the hands of the insurgents, most by the 
SL; many analysts believed that seized police arms provided a large 
share of the guerrillas' weapons stock. 

As the incipient insurgency began to grow in Ayacucho, where 
the SL originated, the new civilian government's initial response 



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in October 1981 was to send the specially trained police counter- 
terrorist unit to the area to combat it. The Sinchi Battalion, named 
after pre-Incan warriors by that name, had proven quite effective 
on previous missions, which had included riot control, squatter evic- 
tion, and servings as replacements for the 1980 Cusco police unit 
work slowdown. However, in Ayacucho the Sinchis appeared to 
make a difficult situation worse by some acts of indiscriminate vio- 
lence and abuse, and they were withdrawn before the Belaunde 
administration decided to put the area under military control in 
December 1982. It was believed that the Sinchis underwent a 
thorough vetting and retraining before being committed to other 
actions, where their performance was much improved. 

Although the police had primary responsibility for dealing with 
drug-trafficking activities in Peru from the mid-1970s onward, that 
role expanded markedly during the 1980s. The Peruvian military 
consistently held that coca eradication and drug interdiction were 
designated by the constitution of 1979 as responsibilities of the police 
rather than of the armed forces. However, the army did indicate 
its willingness to assist with security against the insurgents, so that 
the police would be better able to carry out antidrug operations. 
Because Peru was the world's largest producer of coca used to make 
cocaine, the police concentrated on eradication and interdiction. 
Because the Upper Huallaga Valley produced most of the cocaine 
(between 60 and 65 percent of world supply), the police concen- 
trated there. The United States government helped with DEA per- 
sonnel, an AID assistance program, and, in 1989, resources and 
assistance for the Santa Lucia base, including a 1,500-meter run- 
way. Three United States mobile training teams of Green Berets 
helped prepare National Police units in base defense and inter- 
diction techniques, providing short-term training in 1989-91. 
Contracted United States specialists continued training subse- 
quently. 

Although United States financial support for the antidrug produc- 
tion and trafficking program in Peru was modest, it did increase 
from about US$2.4 million in 1985 to US$10 million in 1990. Even 
so, both the hectarage under cultivation and the production of coca 
in the Upper Huallaga Valley increased to 79,000 hectares accord- 
ing to United States government estimates, which were quite con- 
servative compared with those of Peru's Ministry of Agriculture. 
The latter estimated that 8,400 hectares were cultivated in the Upper 
Huallaga Valley in 1978 and 150,000 in 1990. Estimates as of early 
1992 were 100,000 hectares (United States figures based on aerial 
surveys) or 315,000 hectares (Peruvian figures based on ground 
site inspection). 



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Efforts to reduce drug production and trafficking in the Upper 
Huallaga Valley were hampered by a number of negative factors. 
One was the insurgency; both SL and MRTA forces began to oper- 
ate in the valley in 1985 and 1986. Attacks on police and govern- 
ment employees working on eradication and interdiction forced 
suspension of most antidrug operations in the Upper Huallaga Val- 
ley between February and September 1989. The guerrillas posi- 
tioned themselves as the protectors of the coca-growing peasants, 
while collecting "taxes" and drug-flight protection payments esti- 
mated at between US$10 million and US$30 million per year. Only 
when the army was able to drive the insurgents out of much of 
the valley, as occurred for a time in late 1989 and early 1990, could 
antidrug-trafficking operations resume. When they did, the em- 
phasis shifted to interdiction rather than eradication. 

Other problems included the perception among much of the local 
population that many of the police stationed in the Upper Huallaga 
Valley were either abusive or corrupt, or both. This perception 
led to a substantial overhaul of the police forces (and of the army 
as well) by the Garcia administration during its first year in office, 
when a reported 2,000 to 3,000 police members were removed, 
reshuffled, or retired. Shortly after President Fujimori took office 
on July 28, 1990, another reshuffling took place that forced the 
retirement of nearly 350 police officers and 51 police generals, some 
of whom, United States officials believed, were among the drug- 
trafficking initiative's most able and experienced personnel. 

A number of incidents involving the police during the first year 
of the Fujimori government led Minister of Interior general Vic- 
tor Malca Villanueva to disclose that 23 officers and 631 police 
members had been dismissed and another 291 officers and 600 
police members were facing administrative action. Among the 
events leading to this announcement were the shooting down of 
a Peruvian commercial plane in the jungle at Bellavista, San Martin 
Department, with the loss of all seventeen on board; the murder 
of a medical student and two minors in Callao; the disappearance 
of fifty-four kilograms of cocaine after a police seizure; the release 
of a Colombian drug trafficker's plane after large payments to police 
involved in its capture; and the hold-up of buses on the highways 
to rob their passengers. General Malca announced on July 12, 1991, 
that evidence of "enormous corruption" and serious excesses com- 
mitted by some of the PN's members required "a total restructur- 
ing," and that the Peruvian government was in contact with the 
Spanish police to enlist their assistance in the task. 

The underlying factors contributing to the problems of the PN 
included the constant threat and frequent reality of guerrilla attacks; 



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Peru: A Country Study 

the low pay (only US$150 per month for top generals and between 
US$10 and US$15 for new enlisted police) resulting from infla- 
tion's impact on the capacity of government to keep up with previ- 
ous levels; and continuing tensions with armed forces counterparts, 
particularly the army, over roles, responsibilities, coordination, and 
support. These difficulties eroded the capability of the police forces, 
particularly the PG, to operate efficiently and with a high degree 
of professionalism. 

The problems with the armed forces spilled over into a direct 
confrontation between striking police in Lima and the army in 
February 1975. The confrontation was settled only after a shoot- 
out in the police command that resulted in the deaths thirty police 
members and seventy civilians. Other, less dramatic incidents oc- 
curred as well. In March 1989, when the military failed to respond 
to urgent requests for assistance by a police force besieged by SL 
guerrillas at Uchiza, in the Upper Huallaga Valley, the police felt 
that they had been humiliated by another branch of their own 
government, as well as defeated in that encounter with the guer- 
rillas. General Armando Villanueva Ocampo saw no alternative 
but to resign as minister of interior. The explanation that no helicop- 
ters were available and that no order had been given was uncon- 
vincing. Others blamed the failure to respond on interservice 
rivalries and a perception by some military personnel at the time 
that the police in the Upper Huallaga Valley were getting more 
than their share of the technical and material assistance available 
to fight drug production and trafficking. 

Security Police 

Although renamed in the police reorganization begun in 1986, 
the Security Police (PS), formerly the Republican Guard, continued 
to have responsibility for border control, custody of the prisons, 
and responsibility for guarding significant government buildings. 
The PS grew the most rapidly of all the police forces in the 1980s, 
going from 6,450 members in 1980 to 21,484 in 1986. Some 20 
percent of the force was detailed to prison duty, with a large por- 
tion of the rest distributed among public buildings and 177 border 
stations. Another sixty-one border stations were to have been 
added or reactivated by 1990, thirty-two of them staffed jointly with 
the army, but budget difficulties may well have delayed these. There 
was also a small parachute squadron, formed in 1963. Until the 
early 1970s, this police subgroup recruited its personnel directly 
from the army and had no training establishment of its own. In 
1973 the minister of interior opened an advanced training school 
for upper-level career officers; a comprehensive training center for 



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all ranks was expected to follow at the end of the decade. In the 
early 1990s, it was still unclear how the integrated police services 
officer school, which began operating in the late 1980s, would ul- 
timately affect the PS's own training establishments. 

The growing drug-trafficking problem across Peru's borders, par- 
ticularly with Colombia and Brazil, provided the PS with addi- 
tional challenges. The additional border posts were envisioned as 
one way to respond because most were proposed for areas where 
the drug trafficking was believed to be concentrated. However, the 
growing prison population during the 1980s posed more difficul- 
ties for the PS; many of these difficulties had to do with the prisoners 
accused and/or convicted of terrorism. 

In December 1989, two police officers were found guilty of abuses 
in the prison massacre by a Military Justice Court and were sen- 
tenced to prison terms. The other sixty-nine police members and 
six army officers accused were acquitted, but in June 1990 the not- 
guilty verdicts of eight of the police officers were overturned in a 
Military Appeals Court. One officer was sentenced to one month 
in jail, the other to seven to six months. 

Technical Police 

The police reorganization of 1988, which created the Technical 
Police (PT), gave it the same functions as its predecessor, the In- 
vestigative Police of Peru. The PT served as Peru's intelligence 
service for state security, as well as an investigative unit in crimi- 
nal and terrorist cases, much like the Federal Bureau of Investiga- 
tion (FBI) of the United States. A special section, the National 
Counterterrorism Division (Direccion Nacional Contra el 
Terrorismo — Dincote, formerly known as Dircote) focused main- 
ly on the SL and MRTA. Headquartered in Lima's Rfmac dis- 
trict, the largely plainclothes PT also operated out of the same main 
regional offices as the military and the PG, or on special assign- 
ment from the Lima office. As of 1986, the PT had a total staff 
of 13,165, including a few women agents, and was fully autono- 
mous from the former Civil Guard (GC). 

The effects of the police reorganization on PT training were not 
clear by 1990, but the PT's distinctive responsibilities probably as- 
sured continuity rather than change. Despite suffering from the 
same restrictions and limitations imposed by the economic crisis 
and the insurgency, the PT showed fewer signs of trouble than its 
sister services. The PT's Instruction Center was based in the San 
Isidro district of Lima and offered both a full four-year course for 
prospective officers in its Cadet School, as well as specialized train- 
ing in police technology and criminology in its Detective School. 



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Successful completion of mid-career courses was a requirement for 
eligibility for continued advancement in the service. 

In September 1992, Dincote succeeded in capturing SL head 
Guzman. The capture gave the government and the police forces 
a badly needed major victory against the Shining Path at a critical 
juncture and greatly enhanced the standing of the country's be- 
leaguered police forces. 

Changing Threats to National Security 
External Threats 

Historically, the major security challenges to the country and 
its military were external in nature, usually involving issues of bor- 
ders and territorial disputes. Peru engaged in more foreign wars 
after independence than any other Latin American country, 
although most occurred in the nineteenth century. The conflicts 
were with Colombia, 1828; Argentina, 1836-37; and Chile, 
1836-39; Bolivia, 1827-29, 1835, and 1841; Ecuador, 1858-59; 
Spain, 1863-66; Chile, 1879-1883. Most of the nineteenth-century 
conflicts went badly for Peru. The most disastrous was the War 
of the Pacific against Chile. In many ways, this conflict could be 
considered more significant than the gaining of independence, given 
the war's impact on the development of present-day Peru. 

In the twentieth century, the Peruvians, as of late 1992, had en- 
gaged in two wars and two significant border skirmishes. In the 
Leticia War of 1932-33, named after the Amazonian city, Peruvian 
army and naval units were unable to keep Colombia from holding 
onto territory originally ceded by Peru in 1922 in the Salomon- 
Lozano Treaty. The 1941 war with Ecuador, however, was a major 
success for Peruvian forces. Peru had established the first paratroop 
unit in the region and used it to good effect; the first combat in 
the hemisphere involving airborne troops resulted in the capture 
of Ecuador's Puerto Bolivar July 27, 1941 . By the end of the month, 
when military actions had ceased, Peru held Ecuador's southern- 
most province of El Oro and much of the disputed eastern jungle 
territory that had been part of Ecuador since the 1830s. The Rio 
Protocol of February 1942 awarded to Peru some 205,000 square 
kilometers of previously disputed Amazon territory. 

Ecuador repudiated the Rio Protocol in 1960, and border inci- 
dents occurred periodically thereafter. None were as serious as the 
January 1981 incursion by Ecuadorian troops that led to a partial 
mobilization of forces by both countries. The dispute was resolved, 
much to Ecuador's displeasure, by the original guarantors of the 
Rio Protocol — the United States, Argentina, Brazil, and Chile. 



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National Security 



Periodic incidents since have indicated that problems remain, par- 
ticularly along a seventy-eight kilometer stretch of the border known 
as Cordillera del Condor, which was never marked off under the 
terms of the Rio Protocol. Tensions between Peru and Ecuador 
increased in 1992 after Ecuadorian troops were alleged to have 
crossed the border in July in a section that had been marked off; 
Ecuador denied the charge. However, urgent conversations between 
the two governments led to an interim agreement in October in 
hopes of avoiding a new border crisis. 

This continuing border disagreement exacerbated the lingering 
bitterness over the loss of Peruvian territory to Chile in the south 
and Peruvian alarm over the coup that brought the Chilean mili- 
tary to power in September 1973. The coup was followed by major 
increases in military spending by Chile and an aborted effort to 
give Bolivia access to the Pacific through former Peruvian territory. 
Concern over these two developments contributed to Peru's deci- 
sion to continue to mass most of its military forces near the north- 
ern and southern borders, even as domestic insurgency increased 
through the 1980s. Peru also mounted a diplomatic initiative with 
Bolivia in 1991-92 to open up a trade corridor for Bolivia to the 
Peruvian coast, with special free port access to the coastal city of 
Ilo. This action was viewed as another effort by Peru to defuse bor- 
der issues so as to be freer to pursue the internal security threat. 

Internal Threats 

The Peruvian armed forces have had to face several internal 
threats to national security since the 1930s. APRA, Peru's first 
mass-based political party, mounted at least seven attempts to take 
power by force between 1931 and 1948, after being frustrated in 
its efforts to gain access through elections. Its reformist agenda was 
perceived as revolutionary and totally unacceptable to the senior 
military command, although the party did have some success in 
gaining support among junior officers, NCOs, and even an occa- 
sional senior official. The most serious of the APRA coup attempts 
were the revolt of February 1939, led by army General Antonio 
Rodriguez, second vice president and minister of government in 
the administration of General Oscar Raimundo Benavides (presi- 
dent, 1914-15, 1933-39), and the October 1948 naval revolt in 
Callao by APRA cells among junior officers. Both were put down 
violently by loyal army forces, but had the effect of further inflam- 
ing military opposition to APRA because of the party's attempts 
to subvert the integrity of the military institution itself. This mili- 
tary opposition lingered well into the 1960s even though the 1948 
revolt was APRA's last attempt to gain power by force. 



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Peru: A Country Study 

Guerrillas in the 1960s 

The organization of farmers in Cusco's Valle de la Convencion, 
beginning locally in 1951 and with the aid of Trotskyite Hugo Blan- 
co starting in 1960, was the most visible of various efforts in rural 
Peru in the 1950s and 1960s pushing for land reform. The farm- 
ers' movement in La Convencion whose principal tactic was to oc- 
cupy land was successful only after a period of violent confrontation 
with landowners, police, and the military and the capture of Blan- 
co and most of his partisans in May 1963. It was the first example 
of substantial, locally organized pressure for agrarian reform. The 
Government Junta (Junta de Gobierno) (July 1962 to July 1963) 
officially ratified this de facto local reform as part of its newly 
progressive approach to dealing with Peru's problems. This initia- 
tive gave an early indication of how the armed forces preferred to 
deal with issues of development that became related to internal 
security. 

The peasants' success in La Convencion inspired many others 
around the Peruvian highlands to carry out their own land occu- 
pations, a large number of them coordinated with the return to 
elected government on July 28, 1963, as President Belaunde took 
office. More radical groups, Cuban inspired, also saw the grow- 
ing rural ferment as an opportunity to begin armed revolution in 
the countryside. One was the Movement of the Revolutionary Left 
(Movimiento de la Izquierda Revolucionaria — MIR), created in 
1962 and led by Luis de la Puente Uceda with other disaffected 
former APRA militants. Operating in Cusco, the MIR was tracked 
down and destroyed by the military in October 1965, and de la 
Puente was killed in action. Another radical group was Guillermo 
Lobaton's Tupac Amaru (not to be confused with the MRTA), 
which suffered the same fate in Junin in January 1966 after six 
months of skirmishes. A third group, from the National Liberation 
Army (Ejercito de Liberacion Nacional — ELN), a Castroite force 
founded in 1962 and led by Hector Bejar Rivera, was also defeated 
in early 1966 in Ayacucho. Bejar was captured and jailed in late 
1965. Freed in the military government's Christmas 1970 amnesty, 
he became an important official in the regime's organization to foster 
the labor movement. These guerrilla activities and military responses 
helped convince the armed forces that central government reforms, 
rather than continued protection of the status quo, were the preferred 
route to defend Peru's domestic security needs. 

Although the military junta's reforms were ultimately unsuccess- 
ful, the regime did attempt to resolve the problems it created by 



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National Security 



turning the political process back to the civilians. It did not try to 
overcome its own legitimacy crisis by force. The military regime 
also opened up the system to the left — political parties and unions 
especially — for the first time on a sustained basis in Peru's history. 
Both the constitution of 1979 and the elections of 1980 were to a 
significant degree the results of the military's decisions. In this con- 
text of the restoration of civilian rule and all the enthusiasm that 
accompanied it, what was totally unexpected was the simultane- 
ous preparation for the inauguration of guerrilla war by an ob- 
scure provincial Maoist university group known to outsiders as the 
SL and to militants as the Peruvian Communist Party (Partido 
Comunista Peruano — PCP). 

Guerrilla Insurgency, 1980-92 

The SL launched its people's war with the burning of ballot boxes 
in the provincial Ayacucho market town of Chuschi on May 17, 
1980, the eve of national elections. Unlike the short-lived guerril- 
la movements of the mid-1960s, the SL extended its range of ac- 
tivities and actions over the course of the 1980s and contributed 
to the expansion of violence by other guerrilla organizations, as 
well as by common criminals. By mid- 1992 political violence ac- 
counted for over 25,000 casualties. The SL insurgency also caused 
some US$22-billion worth of property damages from direct de- 
struction and indirect loss of production and employment. 

The SL's success in comparison with earlier insurgencies' failures 
had at least six explanations. First, the movement organized and 
developed over a fifteen- to seventeen-year period before it launched 
its "armed struggle. " Second, the SL began and grew in a provin- 
cial university (San Cristobal de Huamanga) beyond the regular 
purview of central government authorities and in an isolated high- 
land department (Ayacucho). In 1990 Ayacucho Department was 
still one of the most sparsely populated and economically deprived 
departments, one that generated a meager 1 percent of Peru's GNP. 
Third, the SL was organized from the outset and directed by a 
single individual, professor Abimael Guzman Reynoso, who had 
the capacity to impose an iron discipline, attract many of the univer- 
sity's most able students and faculty, and build a strategy of revolu- 
tionary war in Peru drawn from Mao Zedong and other leading 
Marxist thinkers and practitioners. Fourth, the government re- 
sponse was delayed for years because it refused to take the SL seri- 
ously. When the government did act, it was often on the basis of 
strong and sometimes indiscriminate military action rather than 
through a combination of military and economic activities that 
responded to the real problems of the provinces that the SL was 



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Peru: A Country Study 

trying to exploit. Fifth, continuing and often increasing economic 
difficulties during the 1980s made it harder for the political center 
in Lima to respond effectively to the growing needs of the periph- 
ery and gave the guerrillas more opportunities. For example, the 
SL moved into the Upper Huallaga Valley and became involved 
in the coca production and cocaine-paste trafficking business, which 
generated resources estimated to be as much as US$30 million per 
year that were used to pay SL salaries and strengthen the SL's 
domestic infrastructure. And sixth, the SL's insistence on autar- 
kic autonomy took it out of the mainstream international communist 
movement, with all of its uncertainties, and gave it a greater sense 
of its own significance. 

As of mid- 1992, the SL was believed to have between 3,000 and 
4,000 armed cadre and some 50,000 supporters in various civilian 
support groups. Although the SL began in Ayacucho, the move- 
ment consciously expanded to other departments, so that by 1992 
most of its actions took place in other areas — particularly Lima, 
Ancash, Junin, and the Upper Huallaga Valley. The movement 
was organized into a Central Committee and Politburo and six 
regional commands, all of which had a certain degree of autono- 
my that allowed them to adjust to special local circumstances. A 
strict hierarchy of commitment was maintained: from sympathiz- 
ers to activists to militants to commanders to the Central Com- 
mittee and Politburo. The militants formed the armed cadres and 
the assassination squads; the sympathizers and activists operated 
in the SL's Popular Aid (Socorro Popular) organization to help 
the SL prisoners or families of fallen comrades, to assist in legal 
defense or recruitment, to march in demonstrations, and to un- 
dertake other activities. Nineteen Central Committee members and 
five Politburo leaders were believed to make the decisions for the 
organization; they were replaced as needed by the most qualified 
of the militants and so on down. Assassination squads had back- 
ups to increase the chances of successful operations. 

The SL recruitment took place primarily among the young and 
the marginalized (see Glossary); the organization included large 
numbers of women and fourteen- to eighteen-year-old boys. Sym- 
pathizers gradually proved themselves by their actions and advanced 
to the status of militants. Visits by journalists to prisons where cap- 
tured SL militants were housed suggested that indoctrination was 
intensive and total, with songs, marches, plays, and skits that sug- 
gest a training both ideological and personal. Members appeared 
to be transformed by their experience, adopting a new, more aes- 
thetic life-style, total subordination to the cause of the revolution, 
and an apparent utter conviction. These transformations invited 



306 



Campesinos from Pomacocha, near Ayacucho, whose mayor was 
recently assassinated, meet with an agronomist. 
Courtesy Inter-American Development Bank 

comparisons with religious fundamentalist converts. For the in- 
dividual, the experience could be uplifting and liberating; at the 
same time, the person put himself or herself in a situation of com- 
plete subservience to the organization and its leadership. 

Guzman and his colleagues were convinced that they had unlocked 
the secrets of Marxism-Leninism and Maoism and were pursuing 
the correct revolutionary course even as communist movements 
and governments collapsed around the world. To Guzman, or 
"Presidente Gonzalo," as he was called in the SL, the failure of 
world communism resulted from its unwillingness to apply the 
purifying orthodoxy of China's Cultural Revolution that is, to 
return regularly to the movement's essential proletarian founda- 
tions. The PCP was to Guzman the new beacon of hope for world 
revolution; the SL's advance worldwide depended first on its slow, 
methodical, and above all "correct" movement forward in Peru. 
It was a movement that took the long view, building and progressing 
slowly on its own terms. Organization and cadre were more im- 
portant than territory at this point, particularly among the urban 
proletariat; hence, the greater focus after 1988 on building the move- 
ment in the cities, particularly Lima. 



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Peru: A Country Study 

Terrorism and intimidation were part of the strategy used to neu- 
tralize those key individuals whom the SL could not co-opt, but 
almost always on a very selective basis, not indiscriminately, and 
usually for political, not military, reasons. Key targets were local 
officials, especially candidates and elected officers of communities, 
towns, organizations, and unions. Targets also included selected 
government employees and key foreign technicians in rural develop- 
ment projects. Occasionally, a national figure — such as a general, 
an admiral, or a deputy to Congress — was assassinated to drive 
the message home that no one was safe, that the central govern- 
ment and the military were unable to protect their own. 

The 1989 municipal and 1990 national elections went ahead as 
scheduled despite SL threats, but over 400 local districts (out of 
some 2,016) remained bereft of elected officials. Most foreign de- 
velopment projects, including those of France, the Netherlands, 
and Japan, with between 500 and 1,000 specialists in the field, 
pulled their people out of rural areas or quietly withdrew from Peru 
entirely after one to three of each group's members were killed in 
1989-91, and the Peruvian government could not guarantee the 
safety of those remaining. 

Attacks on Peru's infrastructure sent a similar message — electrical 
pylons were toppled, bridges and railroad tracks blown up, roads 
catered, factories bombed. Through such actions, the SL, although 
unable to paralyze the country, did impair its function. Living in 
Lima became more difficult because of electric-power cutoffs and 
rationing, water-use limits, and spot shortages of key foodstuffs. 
About 150,000 Peruvians emigrated each year in 1988 and 1989, 
according to official statistics; in 1990 the figure was 328,000. 

The expansion of violence by the SL also took its toll on the armed 
forces. Thirty-one military and forty-five police members were killed 
in political violence in 1985; in 1990 there were 135 military fatal- 
ities and 163 police deaths. The expansion in the number of 
provinces under a state of emergency owing to the insurgency forced 
the deployment of an estimated 15 percent to 20 percent of the 
armed forces, predominantiy the army, to these areas. Because most 
of the military's equipment was originally purchased for more tradi- 
tional border defense purposes rather than for combating insur- 
gency, there were continuing shortages of materiel. In addition, 
the economic crisis of the late 1980s and early 1990s reduced the 
defense budget substantially, making such fundamental activities 
as provisioning and maintaining troops in the field quite difficult 
at times. Helicopter maintenance was a particular problem. Un- 
der those conditions, human rights violations by the armed forces 



308 



National Security 



and police increased substantially in the late 1980s after marked 
improvement in 1985 and 1986. 

In spite of the multiple challenges posed by the insurgency, the 
armed forces also experienced a number of important successes. 
These included the June 1988 capture of several important SL lead- 
ers, including Osman Morote Barrionuevo, believed to have been 
the organization's number- two figure and chief military strategist. 
There were also major raids on SL safehouses in Lima in 1990-91 
that yielded key documents and computer files of the organization; 
one raid reportedly came within minutes of capturing Guzman him- 
self. Significant military operations in the Upper Huallaga Valley 
in 1989 under the command of General Alberto Arciniega Huby, 
the political-military chief of the region, restored government control 
to most of the area, at least temporarily, and resulted in many SL 
casualties. Guerrilla fatalities nationwide increased markedly, from 
630 in 1985 to 1,879 in 1990. These military successes were at- 
tributed to a number of factors, including improved intelligence 
gathering and coordination with the military units in the field, as 
well as the overextension of the SL organization in some parts of 
the country and the SL's use of larger military units in the field. 
In addition, the SL met with greater civilian resistance as peasant 
communities organized armed peasant patrols {rondos campesinas) 
that served as volunteer defense forces. 

The most dramatic government success was the September 1992 
capture in Lima of Guzman himself along with other important 
SL figures, including at least three members of the Central Com- 
mittee. This Dincote operation resulted from painstaking police 
intelligence work. Guzman's capture helped restore the tattered 
prestige of Peru's police forces and gave the Fujimori government 
a significant psychological boost at a critical juncture. Guzman was 
tried in a military court that October and sentenced to life imprison- 
ment without parole. He began his imprisonment in solitary con- 
finement in a military prison on San Lorenzo Island. Documents 
seized in the September safehouse raid led to the subsequent cap- 
ture of other important SL militants at the regional and local lev- 
els. Many, although far from all, analysts believed that this was 
the beginning of the end for the SL, especially if the government 
could take advantage of the movement to begin implementing lo- 
cal development projects. 

The military and police forces also experienced considerable 
success against a much smaller and more conventional guerrilla 
organization, the Tupac Amaru Revolutionary Movement (Movi- 
miento Revolucionario Tupac Amaru — MRTA). Organized in 
1985 by disaffected members of the youth wings of several of 



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Peru: A Country Study 

Peru's legal Marxist parties, the MRTA began to compete with 
the SL for support, primarily in Lima, parts of the Upper Hualla- 
ga Valley, and the adjacent jungle. Some of its members were killed 
by SL forces and by the military. A number were captured, in- 
cluding, in 1988, the MRTA's head, Victor Polay Campos. By 
early 1990, much of the organization had been disbanded and its 
jailed leadership was trying to work out a negotiated settlement 
with the government for the ending of hostilities. But the MRTA 
got a new lease on life in July 1990 when some forty-seven jailed 
members, including Polay, tunneled their way to a mass escape 
from Lima's Canto Grande Prison. The crowning indignity for 
the outgoing APRA administration was that the escapees video- 
taped the entire operation. 

In the months to follow, the MRTA resumed operations with 
expanded military activities in the Upper Huallaga Valley and ad- 
jacent jungle, and elsewhere. The MRTA appeared to be more 
willing to consider conversations with government authorities than 
the SL, which adamantly refused any contact. However, because 
they were responsible for only between 10 and 20 percent of the 
incidents of political violence, it was not likely that any settlement 
that could be reached would significantly diminish Peru's insur- 
gency problem. In any event, with Polay's recapture in 1992, along 
with a substantial number of his lieutenants, the MRTA appeared 
to be close to elimination as a significant guerrilla threat. The same 
careful police intelligence work that brought in Guzman enabled 
Peru's government to advance against the MRTA. 

Narcotics Trafficking 

As the world's largest producer of coca and cocaine paste, Peru 
had a major drug- trafficking problem during the 1980s, concen- 
trated in and around the Upper Huallaga Valley, where most of 
the coca used in the manufacture of cocaine for export was grown. 
Weekly flights from the area's more than 100 clandestine airstrips 
by small aircraft laden with cocaine paste were believed to have 
peaked in 1988 and 1989 at about fifty. Concentrated efforts in 
late 1989 and 1990 to restrict the trafficking in Colombia, the des- 
tination of most flights, and in Peru itself were partially success- 
ful, as indicated by a sharp overall decline in price for the coca 
leaf. Counting Peruvian coca growers (estimated to number be- 
tween 70,000 and 320,000), cocaine-paste processors (estimated 
at between 23,000 and 107,000), and cocaine-paste transporters 
(some 2,400 to 1 1 ,000), from 95,400 and 438,000 individuals were 
employed in the illicit production and preliminary refining of the 
drug in Peru. Considering the average peasant family size of five, 



310 



National Security 



between 477,000 and 2.64 million Peruvians, or between about 
4 percent and 20 percent of the country's economically active popu- 
lation depended directly on coca and cocaine-paste production for 
their livelihoods. About 10 percent of Peru's coca production was 
legal; the indigenous population purchased most of this amount 
for traditional uses. Joint Peruvian-United States efforts to reduce 
the supply of cocaine reaching North America initially focused on 
coca crop eradication but shifted to interdiction and crop substitu- 
tion in the late 1980s, in part because of tensions with peasant 
growers. 

Cocaine and cocaine base use among Peruvians was also per- 
ceived as a problem. A 1990 national epidemiology study of drug 
use among 12- to 50-year-olds put one-time use of cocaine paste 
at 4.6 percent and more frequent cocaine use at 1 .5 percent, slightly 
higher than a similar study conducted in 1986. It was believed that 
drug use in and around centers of drug production was growing 
much more rapidly. Arrests for drug consumption were about 1,900 
in 1985, peaked at 2,200 in 1986, and then declined to about 1,275 
in 1989, but rose to 2,055 in 1991 and 3,707 in 1992. Cocaine seized 
by Peruvian authorities showed a similarly erratic pattern — 0.03 
tons in 1987, 0.06 in 1988, 0.30 in 1989, 8.50 in 1990, 5.17 in 
1991, and 6.93 tons in 1992. Peruvian authorities recognized the 
seriousness of the drug production and trafficking problem but were 
more worried about the economic crisis and the insurgency. 

Crime and Punishment 

Rising Crime Rates 

Just as Peru's armed forces and police were buffeted by a num- 
ber of challenges during the 1980s, so too were the country's judi- 
cial and penal systems. Despite the return to civilian government 
in 1980 under the constitution of 1979 and the widespread expec- 
tation at the time that this would also normalize the application 
and administration of justice, such was not to be the case. The recur- 
ring economic crisis of the 1980s and early 1990s prevented the 
judicial branch from receiving the constitutionally mandated 2 per- 
cent of the government budget. In 1989 the sum appropriated was 
1.4 percent; in 1990 it was 0.9 percent, or about US$15 million. 
The economic difficulties also contributed to increases in crime rates 
as more of the population struggled to cope with rising unemploy- 
ment and underemployment. Recorded crimes of all types increased 
from 210,357 in 1980 to 248,670 in 1986, or by 18 percent; these 



311 



Peru: A Country Study 

data, compiled by the General Police (PG) and the Technical Police 
(PT), were believed to underrepresent actual figures. 

Incomplete data resulted in part from the growing number of 
provinces that were under states of emergency during the 1980s 
because of insurgent activity (almost half of Peru's 183 provinces 
by mid- 1991). The states of emergency suspended constitutional 
guarantees of due process and freedom of movement and assem- 
bly, and placed all executive branch authority in local military com- 
mands. Many actions by military and insurgents alike were often 
not reported as crimes. 

The guerrillas also threatened judicial branch officials at all lev- 
els and killed some, so that at times large numbers of openings, 
particularly at the lower levels, were much delayed in being filled. 
(In 1989, for example, over one-third of Peru's 4,583 justice of 
the peace positions were vacant.) The combination of vacancies 
and intimidation then further delayed judicial resolution of pend- 
ing cases; a mere 3.1 percent of crimes committed in 1980 result- 
ed in sentences, only 2.6 percent in 1986. Of the approximately 
40,000 inmates in Peru's prisons in 1990, 80 percent were waiting 
to be tried and nearly 10 percent had completed their sentences 
but remained in jail, according to the head of the Minister of In- 
terior's National Institute of Prisons (Instituto Nacional 
Penitenciario — Inpe). Concern was also expressed that many of 
the justices and judicial branch employees replaced during the 
1985-90 APRA government were selected more by political rather 
than judicial criteria. In short, a situation that had always been 
far from satisfactory became even less so by 1990. 

One result of President Fujimori's autogolpe of April 5, 1992, was 
the suspension and reorganization of Peru's judiciary. As of Oc- 
tober, over half of the twenty-five Supreme Court judges had been 
replaced, along with scores of judicial officials at other levels. Among 
other post-April 5 changes were decrees defining terrorism as trea- 
son, thereby placing trials for alleged actions in military courts as 
well as extending sentences from a twenty-year maximum to life 
imprisonment without parole. 

The economic crises, the insurgency, and drug trafficking were 
major contributors to rising crime rates in the 1980s. Illegal drug- 
trafficking crimes recorded by the PG between 1980 and 1986 
increased by 67 percent, almost four times the rate of growth of 
crime overall. Drug- trafficking arrests between 1985 and 1988 to- 
taled about 4,500, but were a small fraction of all arrests for al- 
leged crimes for the period (574,393 total arrests, almost 3 percent 
of Peru's population). Guerrilla attacks during the Belaunde govern- 
ment (1980-85) totaled 5,880; deaths attributed to the subversion 



312 



National Security 



came to 8,103. These levels increased during the Garcia govern- 
ment (1985-90) to 11,937 insurgent actions associated with over 
9,660 deaths. Extrajudicial disappearances during the 1980s, most 
often linked to the army and police in the emergency zones, ap- 
proached 5,000. From July 28, 1990, to June 30, 1992, the first 
two years of the Fujimori administration, 2,990 incidents and 6,240 
deaths were recorded. 

Penal Code 

Peru's penal code in force in 1991 was the much amended 1924 
code; it addressed itself primarily to common crime as opposed to 
political violence. The code was expected to be replaced in 1992 
by new statutes that were announced in initial form in April 1991 . 
The amended 1924 code's four volumes dealt with general provi- 
sions, descriptions of felonies, descriptions of misdemeanors, and 
application of punishment. Felonies were divided into categories: 
crimes against the person, the family, or property; crimes against 
the state, public security, and public order; and crimes of moral 
turpitude. Punishments included jail, loss of rights, loss or suspen- 
sion of employment, fines, probation, and warnings. 

The proposed new penal code was intended to bring Peruvian 
law up to date and to make it internally consistent. The legal in- 
consistencies resulting from the many amendments over the years, 
under both civilian and military rule, had produced a very unwieldy 
legal framework. Major changes included specifying white- 
collar crimes; expanding punishment to include community ser- 
vice; considering society's responsibility in the commission of crimes 
by less advantaged individuals; emphasizing the possibilities for 
rehabilitation; specifying economic crimes by monopolies, misuse 
of public funds, and tax evasion; incorporating much more severe 
penalties for drug trafficking, terrorism, and human rights viola- 
tions; and considering as crimes damage to the environment, natural 
resources, and the ecology. The new code was to be subject to a 
national debate by interested parties, as well as to a review by Con- 
gress before going into effect in 1992. The Fujimori autogolpe of 
April 5, 1992, changed this timetable. In the following month, it 
produced a plethora of decree-laws, which responded to a number 
of these issues, particularly those related to criminal activity and 
terrorism. The Democratic Constituent Congress (Congreso Con- 
stituyente Democratico), elected in November, was to incorporate 
or adjust these decrees. The fate of the proposed code was unclear, 
but probably was postponed until after the full return to constitu- 
tional rule scheduled for July 28, 1993. 



313 



Peru: A Country Study 



The constitution of 1979 abolished the death penalty administered 
by firing squad, even though it had seldom been invoked (only 
twelve times between 1871 and 1971). The exception was Article 
235, which allowed for the death penalty for the crime of treason 
during a war with an external enemy. In the 1970s, the military 
government (1968-80) had gradually expanded the list of crimes 
subject to the death penalty, including killing a member of the 
police, killing during a robbery, and mass killing. At least seven 
individuals were put to death on conviction under these statutes. 
The issue of the use of military and police rather than civilian courts 
to try citizens, with no right to appeal to civilian judicial authori- 
ty, also came up frequently during the military regime. Article 282 
of the constitution of 1979 dealt with this difficulty by prohibiting 
application of the Code of Military Justice to civilians except for 
treason. 

Other provisions of the constitution of 1979 also emphasized 
civilian institutions and individual rights. Those provisions included 
the right to habeas corpus; presumption of innocence until proven 
guilty in judicial proceedings; arrest only by judicial warrant or 
in the commission of an offense; the right to go before a judge 
within twenty-four hours of arrest (except for terrorism, treason, 
and drug trafficking); immediate advice in writing as to reasons 
for arrest; access to a lawyer from the time of arrest; authorities' 
obligation to report location of person arrested; the inadmissibili- 
ty of forced statements; no detention without communication; no 
transfer to a jurisdiction not provided for by law; trial only under 
legal procedures; and no torture or inhumane treatment. 

However, Article 231 of the constitution of 1979 allowed for the 
suspension of some civil and political rights under exceptional cir- 
cumstances by a presidential decree of a state of emergency or a 
state of siege for all or any portion of the country. It also allowed 
the president to order the armed forces to assume responsibilities 
for public order from civilian authorities and could be renewed by 
the president every ninety days for an indeterminate period. As 
a result of the insurgency, this article has been invoked repeated- 
ly; the military has been put in charge of every region that has 
been in a declared state of emergency since December 1982, ex- 
cept Lima. The effect of the president's use of Article 231 was to 
substantially erode constitutional guarantees in large sections of 
the country. Civilian courts were denied access to detention areas, 
making it impossible for them to pursue writs of habeas corpus. 
Military courts assumed responsibility for dealing with abuses com- 
mitted by soldiers and were upheld by the Supreme Court. Occa- 
sionally, police were tried for their alleged abuses, as in the successful 



314 



National Security 



prosecution of twelve members of the Sinchi Battalion for a 1983 
massacre in the Ayacucho community of Socos and their sentenc- 
ing to ten to twenty-five years in prison. But these cases were ex- 
ceptional, and most reported abuses went unpunished. With the 
failure of the court system to respond effectively, the Office of the 
Public Ministry (an autonomous monitoring institution empowered 
to press charges), a short-lived special prosecutor for the investi- 
gation of disappearances, and the Congress through a special com- 
mission all tried, with very limited success, to fill the gap. 

The civilian court limitations were manifest in the emergency 
zones, but also were very evident in the rest of the country. Only 
a small percentage of reported crimes were brought to trial in any 
given year (1 to 3 percent). Through June 1984, only 15 of 1,080 
persons held for terrorist acts had been sentenced. As of 1989, less 
than 5 percent of those arrested for terrorist acts had been convict- 
ed. Of the 643 women inmates of Chorrillos Prison in December 
1990, just 117 had received sentences. A smaller number of cases 
reached the Supreme Court in 1989 and 1990 than in 1985, in part 
owing to a six-month strike by the judicial branch in 1989. The 
Ministry of Justice reported in July 1988 that there was a backlog 
of almost 45,000 criminal cases and that two-thirds of all prison 
inmates were still awaiting trial. The weaknesses of the judiciary 
and the strains to which it was subjected by the recurring fiscal 
crisis of the government, the increase in common crime during the 
decade, the insurgency, and the government's response to it made 
the legal principles of the penal code and the constitution of 1979 
virtually impossible to apply in practice. Frustration with the ju- 
dicial system was a major factor in President Fujimori's April 5, 
1992, decision to suspend the constitution, including the judiciary. 
Decree-laws tightened anticriminal and antiterrorist procedures and 
practices, including internal subversion redefined as treason and 
hence subject to trial in military courts. After Guzman's capture 
in September 1992, his rapid trial, conviction, and life imprison- 
ment along with several fellow SL leaders would have been legally 
impossible under the pre-April 1992 status of the laws and the 
judiciary. 

Penal System 

In the second half of the 1980s, Peru's insurgency exacerbated 
the country's already intolerable prison conditions. One of the SL's 
early successes was its March 1982 raid on the Ayacucho Prison; 
the raid freed most of the prisoners, including several SL militants. 
Even though intelligence reports had alerted the GR that an attack 



315 



Peru: A Country Study 

was planned and Lima had sent reinforcements to Ayacucho, the 
local commanding officer chose to disregard the warning. 

Another problem related to the prison policy of segregating the 
SL members from the other prisoners. The SL turned this policy 
to its own advantage by creating model minicamps of collective 
ideological reinforcement and community building within their 
separate cell blocks. Visitors reported an organization and an esprit 
de corps not found in any other part of the prisons. This separa- 
tion probably facilitated coordinated SL prisoner riots at Lurigancho, 
El Fronton, and Santa Barbara prisons in Lima in mid-June 1986, 
as well as the overreaction by GR jailors and the army reinforce- 
ments that were sent in that resulted in the killing of nearly 300 
prisoners, many after they had surrendered. One justification 
offered at the time alluded to the GR's release of pent-up rage af- 
ter having been continuously subjected to threats from the jailed 
militants that their comrades outside prison knew where the guards' 
families lived and would attack them if the inmates were not granted 
special treatment. Later, Minister of Interior Felix Mantilla ac- 
cused PS prison officials at Canto Grande of aiding and abetting 
the July 1990 tunnel escape of forty-seven MRTA prisoners. Af- 
ter the April 1992 autogolpe, President Fujimori took steps to break 
up the blocks of SL militants in prisons, which provoked a riot in 
Canto Grande in May and resulted in the deaths of about twenty- 
five SL inmates and two police officials. 

Peru's prisons, totaling 114 nationwide in 1990, were admin- 
istered by 3,075 employees, with a guard staff made up of about 
4,000 PS members (formerly Republican Guards). Article 234 of 
the constitution of 1979 emphasized the reeducation and rehabilita- 
tive functions of the penal system rather than simply punishment, 
with the goal of eventual reintegration of the prisoner back into 
society. However, that aim remained a distant goal in 1992 rather 
than a realized program. 

Of a 1990 prison population estimated at 40,000, about half were 
in the twenty-five jails in Lima. Although the military government 
began an ambitious program of building new prisons and re- 
habilitating old ones, financial limitations left the project incom- 
plete. In a 1987 survey of prisons to assess their general physical 
state, only 13 percent (fourteen) were determined to be in good 
condition, 53 percent (fifty-nine) were average, and 32 percent 
(thirty-six) were poor; two Lima prisons were not surveyed. Among 
the larger prisons, all in Lima, were Lurigancho Prison, complet- 
ed in 1968; Canto Grande Prison, built in the early 1980s; Miguel 
Castro Prison; and two womens' prisons — Santa Monica Prison 
in Chorrillos District, dating from 1951, and Santa Barbara Prison. 



316 



National Security 



The most dangerous criminals were sent to El Fronton, on a small 
island near the port of Callao, where the isolated blockhouse, known 
as La Lobera (Wolfs Lair), was one of the most dreaded in the 
country. Another principal prison was the agricultural penal colo- 
ny of El Sepa in the jungle of Loreto. 

The twin challenges of a growing prison population and the 
government's continuing economic difficulties contributed to in- 
creasing deterioration of conditions in the prisons, a deterioration 
that had reached crisis proportions by the end of the 1980s. The 
total prison population increased from about 15,000 in 1975 to about 
40,000 by 1990. Peru's largest prison, Lurigancho, built for a max- 
imum inmate population of 2,000, held nearly 7,000 in August 
1990, while Miguel Castro Prison housed over four times its in- 
stalled capacity of 500. Some 168 children were jailed with their 
mothers in Chorrillos Prison. 

At the time the Fujimori government began its term in July 1990, 
Inpe was spending less than US$0.10 daily per inmate on food — 
one meal a day or less. A thirteen-day hunger strike was conduct- 
ed by some 9,000 prisoners in Lima in August 1990 to protest the 
situation. In response, the Fujimori government directed food do- 
nations to the prisons and increased food expenditures to US$0.55 
per inmate in September 1990. 

Of the many other problems, one of the most serious was the 
"custom in the judicial system to delay five years before handing 
down a verdict," as Inpe director Carlos Caparo said in Septem- 
ber 1990. Another problem was the delay in releasing inmates who 
had completed their sentences, which was an estimated 10 percent 
of the prison population. In some cases, prisoners were retained 
because they could not pay the "fees" demanded by authorities 
for signing the five evaluations (medical, legal, social, education- 
al, and psychological) necessary before an inmate could be released. 
With the deterioration in conditions, health problems in the pri- 
sons increased; forty inmates died of tuberculosis in Lurigancho 
alone between January and September 1990. President Fujimori 
stated that about 5,000 of the country's prisoners had life- 
threatening diseases. 

In September 1990, President Fujimori's office promulgated a 
decree setting up a special advisory group, the Special Technical 
Qualifying Commission, to review cases of prisoners held but not 
tried for less serious offenses (drug trafficking, terrorism, and mur- 
der were excluded) for possible presidential pardons. The first 97 
received President Fujimori's official pardon in December 1990, 
with up to 2,000 more expected to be pardoned later. The new 
draft penal code was another major step toward resolving some 



317 



Peru: A Country Study 

penal system problems, but alleviation of many other issues would 
require infusion of new resources that were not yet available in 
1992. Fujimori's April 1992 autogolpe further postponed any defini- 
tive resolution of this problem, other than immediately implement- 
ing a reorganization of Inpe. 

* * * 

The Peruvian military and its relationship to politics and socie- 
ty have been the subject of numerous book-length studies and ar- 
ticles in English, in part because the military takeover in Peru in 
October 1968 turned out to be the first and the most sustained of 
several long-term reformist military governments in the region dur- 
ing this period. Some two dozen books appeared in English describ- 
ing and evaluating the twelve-year regime (1968-80), of which the 
most comprehensive to date in 1992 was The Peruvian Experiment 
Revisited, edited by Cynthia McClintock and Abraham F. Lowen- 
thal. Daniel M. Master son's Militarism and Politics in Latin America 
also covers the reform period in depth, as well as providing the 
most systematic and complete study available in English on the 
Peruvian military in the twentieth century. Among the many arti- 
cles that summarize this period, David Scott Palmer's "Changing 
Political Economy of Peru under Civilian and Military Rule" is 
quite helpful. Particularly useful studies in English include the an- 
nual country reports on human rights practices in Peru submitted 
to the United States Congress by the Department of State; Philip 
Mauceri's The Military, Insurgency, and Democratic Power; Adrian J. 
English's "Peru," in Jane's Armed Forces of Latin America; Carlos 
Ivan Degregori's Ayacucho, 1969-1979; and The Shining Path of Peru, 
edited by Palmer. (For further information and complete citations, 
see Bibliography.) 



318 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Total Population and Annual Population Change in Peru, 

1530-1990 

3 Total Population and Annual Population Change in Lima, 

1614-1990 

4 Population and Percentage Growth of Major Cities, Census 

Years, 1961-90 

5 Total Population and Urban-Rural Breakdown by Depart- 

ment, 1990 

6 Distribution of Population by Region, Census Years, 1940- 90 

7 Education Statistics by Level, 1988 

8 Literacy by Urban-Rural Breakdown, Region, and Sex, 1989 

9 Medical Personnel, Hospitals, and Hospital Beds by Depart- 

ment, 1987 

10 Health Indicators, 1975-90 

1 1 Production of Major Agricultural Crops, 1970, 1980, and 1990 

12 Major Manufacturing Branches: Value Added, 1988, and Per- 

centage Change, 1980-88 

13 Gross Domestic Product (GDP) by Sector, 1950-60 and 1990 

14 Production of Crude Petroleum, 1980-90 

15 Principal Trading Partners, 1980 and 1990 

16 Major Exports, 1970 and 1990 

17 Composition of Labor Force by Sector, 1950, 1980, and 1990 

18 Distribution of Income by Quintile, 1972 and 1985 

19 Results of Municipal Elections, 1980-89 

20 Results of National Elections, 1985 

21 Results of National Elections, 1990 

22 Voting Behavior in the Twelve Poorest Lima Districts, Na- 

tional Elections, 1980, 1985, and 1990 

23 Voting Behavior in the Twelve Poorest Lima Districts, 

Municipal Elections, 1980-89 

24 Major Army Equipment, 1992 

25 Armed Forces Personnel Strength, Selected Years, 1829-1992 

26 Major Naval Equipment, 1992 

27 Major Air Force Equipment, 1992 



319 



Appendix 

Table 1. Metric Conversion Coefficients and Factors 



When you know Multiply by To find 



Millimeters 0.04 inches 

Centimeters 0.39 inches 

Meters 3.3 feet 

Kilometers 0.62 miles 

Hectares (10,000 m 2 ) 2.47 acres 

Square kilometers 0.39 square miles 

Cubic meters 35.3 cubic feet 

Liters 0.26 gallons 

Kilograms 2.2 pounds 

Metric tons 0.98 long tons 

1.1 short tons 

2,204 pounds 

Degrees Celsius 1.8 degrees Fahrenheit 

(Centigrade) and add 32 



Table 2. Total Population and Annual Population Change in 
Peru, 1530-1990 



Annual Population 

Total Change 

Year Population Number Percentage 



1530 1 16,000,000 -2,285,714 -7.1 

1548 8,285,000 -428,611 -2.6 

1570 2,738,500 -252,114 -3.0 

1650 3,030,000 3,644 0.1 

1796 1,076,122 -13,382 0.5 

1825 2,488,000 48,685 4.5 

1836 1,373,736 -97,660 -3.9 

1850 2,001,203 44,819 3.2 

1862 2,487,916 40,559 2.0 

1876 2,651,840 11,709 0.5 

1940 6,207,967 55,564 2.0 

1961 9,906,746 176,132 2.8 

1972 13,572,052 333,209 3.3 

1981 17,005,210 381,462 2.5 

1990 2 22,332,100 743,996 3.4 



1 Estimates for the preconquest population of Peru vary widely but in recent years have been greatly 
increased from the guesses of the 1950s of 3 million to 4 million based on ethnohistorical study on 
the impact of epidemic diseases sweeping the region beginning in about 1524. Recent estimates for 
the population in the territory covering present-day Peru range from 12 million to 30 million. 

2 Estimated. 

Source: Based on information from Henry F. Dobyns and Paul L. Doughty, Peru: A Cul- 
tural History, New York, 1976, 298-99; and Peru, Instituto Nacional de Estadi'stica, 
Poblacion total proyectada al 30 junio de 1990, Lima, 1989, 67. 



321 



Peru: A Country Study 



Table 3. Total Population and Annual Population Change in 
Lima, 1614-1990 



Annual Population 

Total Change 

Year Population Number Percentage 



1614 24,441 n.a. n.a. 

1700 37,259 126 0.5 

1796 52,627 160 0.4 

1836 55,627 75 0.1 

1857 94,195 1,837 3.3 

1862 89,434 -952 -1.0 

1876 100,156 766 0.8 

1891 103,956 253 0.2 

1898 113,409 1,350 1.3 

1903 130,089 3,336 2.9 

1908 140,884 2,159 1.7 

1908 1 172,927 n.a. n.a. 

1920 223,807 4,240 2.5 

1931 373,875 13,642 6.1 

1940 562,885 13,188 9.4 

1961 1,632,370 50,928 9.0 

1972 3,002,043 124,516 7.6 

1981 4,164,597 129,516 4.3 

1990 2 6,414,500 249,989 6.0 



n.a. — not available. 

1 Province of Lima. After 1908 population growth and settlement size made the province the unit for 
measurement. 

2 Estimated. 

Source: Based on information from Henry F. Dobyns and Paul L. Doughty, Peru: A Cul- 
tural History, New York, 1976, 298-99; and Peru, Instituto Nacional de Estadi'stica, 
Poblacion total proyectada al 30 de junio de 1990, Lima, 1989, 67. 



322 



Appendix 



Table 4. Population and Percentage Growth of Major 
Cities, Census Years, 1961-90 
(in thousands) 



Percentage 
Growth 



City 


1961 


1972 


1981 


1990 


(1961-90) 


Lima and Callao . . . 


1,641 


3,394 


4,836 


6,414 


290 


Arecjuipa 


158 


304 


447 


634 


301 


Truj illo 


103 


241 


355 


531 


415 




95 


189 


280 


426 


348 




79 


120 


182 


275 


248 


Piura 


72 


126 


186 


324 


350 


Huancayo 


64 


115 


165 


207 


152 


Chimbote 


59 


159 


216 


296 


401 


Iquitos 


57 


111 


185 


269 


359 




49 


73 


111 


152 


210 


Sullana 


34 


60 


80 


113 


229 




27 


55 


92 


150 


473 




27 


29 


57 


89 


229 




26 


57 


92 


129 


396 




24 


41 


66 


90 


275 


Huanuco 


24 


41 


53 


86 


258 




23 


34 


68 


101 


339 




22 


37 


60 


92 


318 




22 


36 


42 


87 


278 




22 


41 


53 


77 


250 


Pasco 


21 


47 


72 


76 


211 




20 


38 


77 


121 


505 



323 



Peru: A Country Study 



Table 5. Total Population and Urban-Rural 
Breakdown by Department, 1990 * 
(in thousands) 





Urban 


Rural 


Total 


Department 


Number 


Percentage 


Number 


Percentage 


Population 


Amazonas 


111.1 


33.1 


224.2 


66.9 


335.3 




586.3 


59.6 


396.9 


40.4 


983.2 




105.6 


28.4 


266.1 


71.6 


371.7 




818.4 


84.8 


146.6 


15.2 


yoj.u 




236.8 


41.8 


329.6 


58.2 


566.4 


Cajamarca 


298.1 


23.5 


972.5 


76.5 


1 ,27U.O 


„n 


582.0 


98.9 


6.6 


1.1 


COO c 
OOO.O 




465.4 


44.7 


576.4 


55.3 


1 P. 
1 ,Ut:1 .0 


Huancavelica 


107.5 


28.6 


268.2 


71.4 


375.7 


Huanuco 


234.3 


38.5 


374.9 


61.5 


609.2 




464.5 


85.6 


78.4 


14.4 


542.9 


Junin 


688.7 


61.8 


424.9 


38.2 


1 1 1 9 C 

1 , 1 1.5.0 




878.0 


70.6 


365.5 


29.4 


1 ,243.5 


Lambayeque 


741.0 


79.2 


194.3 


20.8 


not q 


T Jmn 


6 490 2 


96.8 


217.1 


3.2 


0,/U/.J 




387.6 


59.3 


266.5 


40.7 


654.1 


Madre de Dios .... 


27.6 


56.3 


21.4 


43.7 


49.0 


Moquegua 


111.7 


83.3 


22.4 


16.7 


134.1 




176.2 


62.3 


106.7 


37.7 


282.9 


Piura 


977.6 


65.4 


516.7 


34.6 


1,494.3 




392.0 


38.3 


631.5 


61.7 


1,023.5 


San Martin 


270.4 


58.8 


189.6 


41.2 


460.0 


Tacna 


178.1 


84.9 


31.7 


15.1 


209.8 




116.8 


81.0 


27.4 


19.0 


144.2 




153.4 


66.7 


76.7 


33.3 


230.1 


PERU 


15,599.3 


69.9 


6,732.8 


30.1 


22,332.1 



* Projected figures. 



Source: Based on information from Peru, Instituto Nacional de Estadistica, Poblacion total 
proyectada al 30 de junto de 1990, Lima, 1989. 



Table 6. Distribution of Population by Region, 
Census Years 1940-90 
(in percentages) 



Year Coast Highlands Selva Total 



1940 25 62 13 100 

1961 39 52 9 100 

1972 45 44 11 100 

1981 51 41 8 100 

1990 * 53 36 11 100 



* Estimated. 

Source: Based on information from Peru, Instituto Nacional de Estadistica, Poblacion total 
proyectada al 30 de junto de 1990, Lima, 1989, 54; and Peru, Instituto Nacional de 
Estadistica, Censos nacionales de VII de poblacion, 1981, Lima, 1981, 45. 



324 



Appendix 



Table 7. Education Statistics by Level, 1988 

Number Number of Student- 

Level of Schools Enrollment Teachers Teacher Ratio 



Primary 27,626 3,864,900 126,117 30.6 

Secondary 5,462 1,801,080 80,273 22.4 

Vocational 1,288 216,920 8,707 24.9 

University 46 431,040 24,911 17.3 

PERU 34,422 6,313,940 240,008 n.a. 



n.a. — not available. 

Source: Based on information from Peru, Instituto Nacional de Estadfstica, Peru: Compendio 
estadistico, Lima, 1987; Encyclopaedia Britannica, 1991 Book of the Year, Chicago, 
1991; and United Nations, Economic Commission for Latin America and the Carib- 
bean, Statistical Yearbook for Latin America and the Caribbean, 1990, Santiago, Chile, 1991 . 



Table 8. Literacy by Urban- Rural 
Breakdown, Region, and Sex, 1989 
(in percentages) 

Males Females Total 

Urban-rural breakdown 



Urban 50 50 100 

Rural 62 38 100 

Region 

Coast 51 49 100 

Highlands 58 42 100 

Selva 59 41 100 

Metropolitan Lima 50 50 100 

PERU * 53 47 100 



* Figures differ sharply from reported 1990 estimated literacy rate of 85 percent (male, 92 percent; 
female, 80 percent). 

Source: Based on information from Peru, Instituto Nacional de Estadfstica, Peru: Compen- 
dio estadistico, Lima, 1987; Encyclopaedia Britannica, 1991 Book of the Year, Chicago, 
1991 ; and United Nations, Economic Commission for Latin America and the Carib- 
bean, Statistical Yearbook for Latin America and the Caribbean, 1990, Santiago, Chile, 1991. 



325 



Peru: A Country Study 



Table 9. Medical Personnel, Hospitals, and Hospital 
Beds by Department, 1987 
(per 10,000 persons) 



Hospital 



Department 


Physicians 


Nurses 


Hospitals * 


Beds 




0.4 


0.4 


93 


4.3 




2.5 


1.4 


232 


11.5 




0.4 


1.1 


83 


6.1 




12.5 


19.3 


248 


22.8 




0.6 


1.8 


176 


7.2 




0.7 


2.0 


149 


2.9 


Callao 


n.a. 


9.6 


55 


30.4 




1.8 


5.7 


201 


10.3 




0.4 


1.0 


156 


6.4 




1.8 


2.6 


113 


7.2 




10.5 


6.0 


98 


21.7 




2.6 


7.8 


253 


13.5 




10.4 


7.4 


209 


13.1 


Lambayeque , 


5.2 


8.2 


73 


13.7 






1 ^ 1 


£on 
DZU 


OA. Q 




2.6 


3.4 


195 


18.5 


Madre de Dios , 


2.8 


2.6 


35 


19.8 




9.6 


11.0 


52 


30.0 




3.7 


3.0 


114 


21.4 


Piura 


2.7 


2.2 


168 


9.3 




0.9 


2.5 


231 


7.3 




1.0 


0.6 


244 


9.4 




5.6 


12.0 


49 


23.6 




1.6 


2.1 


46 


12.3 




1.9 


0.5 


48 


10.3 


PERU 


9.5 


7.4 


n.a. 


16.0 


(Total number) 


20,198 


15,464 


3,941 


32,326 



n.a. — not available. 

* General hospitals, infant hospitals, and clinics. 

Source: Based on information from Peru, Instituto Nacional de Estadistica, Peru: Compendio 
estadistico, Lima, 1987. 



326 



Appendix 



Table 10. Health Indicators, 1975-90 



Heath Indicator 


1 07^ 


iyou-oo 


1 no C QA 


Public health expenditure per capita 1 


n.a. 


n.a. 


17.90 


Average calories per capita 


2,263 


2,144 


2,277 


Food supply as percentage of FAO 










100 


99 


93 




47 


52 


52 




55.5 


58.6 


62.2 


Birth rate 4 


40.5 


36.7 


34.3 




12.8 


10.7 


9.2 



n.a. — not available. 

1 In United States dollars. 

2 FAO — Food and Agriculture Organization of the United Nations. 

3 In percentages. 

4 Per 1,000 population. 



Table 11. Production of Major Agricultural Crops, 
1970, 1980, and 1990 
(in thousands of tons) 



Crop 1970 1980 1990 



Bananas n.a. 684 656 

Coffee 65 86 80 

Corn 615 493 621 

Cotton 248 265 239 

Potatoes 1,929 1,380 1,190 

Rice 587 411 966 

Sugar 7,591 5,598 6,083 

Wheat 125 77 95 



n.a. — not available. 

Source: Based on information from Richard Webb and Graciela Fernandez Baca (eds.), 
Peru en numeros, 1990, Lima, 1990, 438-59. 



327 



Peru: A Country Study 



Table 12. Major Manufacturing Branches: Value Added, 
1988, and Percentage Change, 1980-88 

Value Added, 

1988 (in Percentage 
Branch percentages) Change, 1980- 





30.6 


22.5 




14.2 


-7.9 




6.0 


37.7 




5.7 


0.0 




12.5 


14.5 




5.9 


48.5 




13.9 


-21.7 




9.5 


-7.0 


Other 


1.7 


-11.6 


ALL MANUFACTURING 


100.0 


4.8 



Source: Based on information from Peru, Instituto Nacional de Estadfstica, Evolucidn de 
la economia peruana, Lima, November 1989, 95. 



Table 13. Gross Domestic Product (GDP) by 
Sector, 1950-60 and 1990 * 
(in percentages) 



Sector 1950-60 1990 

Agriculture and fishing 22 14 

Manufacturing 20 22 

Mining 2 11 

Construction 9 7 

Services 43 37 

Government 4 9 

TOTAL 100 100 

* Output evaluated at current prices in each period. 

Source: Averages for 1950-60 based on information from World Bank, World Tables, 
Washington, 1983; data for 1990 from Banco Central de Reserva del Peru, Memoria 
1990, Lima, 1991. 



Table 14. Production of Crude Petroleum, 1980-90 
(in thousands of barrels) 

Year Production Year Production 

1980 71.4 1986 64.8 

1981 70.4 1987 59.7 

1982 71.2 1988 51.7 

1983 62.5 1989 47.6 

1984 67.4 1990 47.1 

1985 68.8 

Source: Based on information from Richard Webb and Graciela Fernandez Baca (eds.), 
Peru en numeros, 1990, Lima, 1990, 521. 



328 



Appendix 



Table 15. Principal Trading Partners, 1980 and 1990 
(in millions of United States dollars) 



1980 1990 



Country 


Exports 


Imports 


Exports 


Imports 




1 997 




739 
/ j/ 


7Q9 




336 


251 


203 


63 




256 


192 


267 


165 




147 


95 


169 


76 




117 


95 


129 


146 


Ecuador 


92 


15 


32 


47 




82 


28 


95 


72 


Chile 


59 


48 


51 


69 


Argentina 


51 


99 


29 


204 




43 


45 


61 


42 


Spain 


24 


45 


42 


24 



Source: Based on information from Richard Webb and Graciela Fernandez Baca (eds.), 
Peru en numeros, 1990, Lima, 1990, 942, 944, 962, and 963. 



Table 16. Major Exports, 1970 and 1990 



Value 



1970 



Percentage Value 



1990 



Percentage 



Traditional 

Copper 252 24.4 732 22.3 

Iron 72 7.0 57 1.7 

Silver 29 2.8 79 2.4 

Lead 63 6.1 182 5.6 

Zinc 49 4.7 412 12.6 

Petroleum products 7 0.7 263 8.0 

Fish meal 303 29.3 341 10.4 

Coffee 44 4.3 97 3.0 

Other 181 17.5 139 4.2 

Total traditional 1,000 96.8 2,302 70.2 

Nontraditional 

Manufactures 19 1.8 628 19.2 

Other 15 1.5 346 10.6 

Total nontraditional ... 34 3.3 974 29.8 

TOTAL 2 1,034 100.0 3,276 100.0 

1 In millions of United States dollars. 

2 Figures may not add to total because of rounding. 

Source: Based on information from Richard Webb and Graciela Fernandez Baca (eds.), 
Peru en numeros, 1990, Lima, 1990, 922-23 and 931. 



329 



Peru: A Country Study 



Table 17. Composition of Labor Force by Sector, 1950, 
1980, and 1990 
(in percentages) 



Sector 


1950 


1980 


1990 


Agriculture and fishing 


59 


40 


34 


Mining 


2 


2 


2 




13 


12 


10 




3 


4 


4 


Services 


23 


42 


50 


TOTAL 


, , , 100 


100 


100 



Source: Based on information from Rosemary Thorp and Geoffrey Bertram, Peru 1890-1977, 
New York, 1978, 259; and Richard Webb and Graciela Fernandez Baca (eds.), 
Peru en numeros, 1990, Lima, 1990, 303. 



Table 18. Distribution of Income by Quintile, 
1972 and 1985 
(in percentages) 



Quintile 1972 1985 



Highest 61.0 51.9 

Second 21.0 21.5 

Third 11.0 13.7 

Fourth 5.1 8.5 

Lowest 1.9 4.4 



TOTAL 100.0 100.0 



Source: Based on information from World Bank, World Development Report, 1989, Washington, 
1989, 223; and World Bank, World Development Report, 1990, Washington, 1990, 236. 



330 



Appendix 



Table 19. Results of Municipal Elections, 1980-89 
(in percentages) 

Party 1980 1983 1986 1989 
Lima 

AP 1 34.8 11.9 n.a. n.a. 

APRA 2 16.3 27.2 37.6 11.5 

ASI 3 n.a. n.a. n.a. 2.2 

Fredemo 4 n.a. n.a. n.a. 26.8 

IU 5 28.3 36.5 34.8 11.5 

Obras 6 n.a. n.a. n.a. 45.2 

PPC 7 20.6 21.2 26.9 n.a. 

Total Lima 100.0 96.8 99.3 97.2 

Nationwide 8 

AP 35.8 15.0 n.a. n.a. 

APRA 22.6 34.0 42.0 17.0 

ASI n.a. n.a. n.a. 0.7 

Fredemo n.a. n.a. n.a. 30.0 

IU 23.9 30.0 32.0 15.0 

PPC 10.9 10.0 9.0 n.a. 

Other n.a. n.a. n.a. 25.0 

Total nationwide 93.2 89.0 83.0 87.7 

n.a. — not available. . 

1 Accion Popular (Popular Action). 

2 Alianza Popular Revolucionaria Americana (American Popular Revolutionary Alliance). 

3 Acuerdo Socialista Izquierdista (Leftist Socialist Accord). 

4 Frente Democratico (Democratic Front). 

5 Izquierda Unida (United Left). 

6 Movimiento Independiente de Obras (Independent Obras Movement). 

7 Partido Popular Cristiano (Popular Christian Party). 

8 Preliminary results. Release of official figures long delayed. 



331 



Peru: A Country Study 



Table 20. Results of National Elections, 1985 



Percentage of 

Votes Number of Seats 

Chamber of 

Party Candidate Senate Deputies 



AP 1 Luis Alva Castro 6.4 5 10 

APRA 2 Alan Garcia Perez 47.8 32 107 

CODE 3 Luis Bedoya Reyes 12.2 8 12 

IU 4 Alfonso Barrantes 

Lingan 22.2 15 48 

Others 5 n.a. 2.6 3 

Null and blank 6 n.a. 8.8 



TOTAL 100.0 60 180 



n.a. — not available. 

1 Accion Popular (Popular Action). 

2 Alianza Popular Revolucionaria Americana (American Popular Revolutionary Alliance). 

3 Confederacion Democratica (Democratic Confederation), consisting of Popular Christian Party (Par- 
tido Popular Cristiano — PPC) and Hayaist Movement (Movimiento de Bases Hayaistas — MBH). 

4 Izquierda Unida (United Left). 

5 Includes National Front of Workers and Peasants (Frente Nacional de Trabajadores y Campesinos — 
Frenatraca), Tacnenist Front (Frente Tacnefiista), and Nationalist Left (Izquierda Nacionalista). 

6 Null and blank vote was half the average of the first four elections. Null means ballots were nullified 
for some reason, e.g., defaced, and blank means ballots were not filled out. 



Table 21. Results of National Elections, 1990 



Percentage of 

Votes Number of Seats 

First Second Chamber of 

Party Candidate Round Round Senate Deputies 



APRA Luis Alva Castro 19.6 2d 14 33 

ASI 2 Alfonso Barrantes 

Lingan 4.1 3 4 

Cambio '90 3 Alberto K. Fujimori 24.3 56.5 15 49 

Fredemo 4 Mario Vargas Llosa 28.2 33.9 22 64 

IU 5 Henry Pease Garcia 7.1 5 18 

Others 6 n.a. 1.0 1 12 

Null and blank 7 . . . n.a. 14.5 9.6 

TOTAL 98.7 100.0 60 180 



n.a. — not available. 

1 Alianza Popular (Popular). 

2 Acuerdo Socialista Izquierdista (Leftist Socialist Accord). 

3 Change '90. 

4 Frente Democratico (Democratic Front). 

5 Izquierda Unida (United Left). 

6 Includes National Front of Workers and Peasants (Frente Nacional de Trabajadores y Campesinos — 
Frenatraca), Tacnenist Front (Frente Tacnefiista), and Nationalist Left (Izquierda Nacionalista). 

7 Null and blank vote was half the average of the first four elections. Null means ballots were nullified 
for some reason, e.g., defaced, and blank means ballots were not filled out. 



332 



Appendix 



Table 22. Voting Behavior in the Twelve Poorest Lima 
Districts, National Elections, 1980, 1985, and 1990 
(in percentages) 



Party 1980 1985 1990 



AP 1 50.2 4.3 n.a. 

APRA 2 16.1 53.6 13.5 

ASI 3 n.a. n.a. 5.6 

Cambio '90 4 n.a. n.a. 39.6 

Fredemo 5 n.a. n.a. 22.7 

IU 6 38.9 31.3 7.1 

PPC 7 11.6 8.8 n.a. 



TOTAL 116.8 98.0 88.5 



n.a. — not available. 

1 Accion Popular (Popular Action). 

2 Alianza Popular Revolucionaria Americana (American Popular Revolutionary Alliance). 

3 Acuerdo Socialista Izquierdista (Leftist Socialist Accord). 

4 Change '90. 

5 Frente Democratico (Democratic Front). 

6 Izquierda Unida (United Left). 

7 Partido Popular Cristiano (Popular Christian Party). 



Table 23. Voting Behavior in the Twelve Poorest Lima 
Districts, Municipal Elections, 1980-89 
(in percentages) 



Party 1980 1983 1986 1989 



AP 1 n.a. 8.7 n.a. n.a. 

APRA 2 20.9 26.5 41.8 12.4 

ASI 3 n.a. n.a. n.a. 3.0 

Fredemo 4 n.a. n.a. n.a. 16.4 

IU 5 18.2 49.9 43.9 15.1 

Obras 6 n.a. n.a. n.a. 49.2 

PPC 7 8.0 11.5 13.3 n.a. 

TOTAL 47.1 96.6 99.0 96.1 



n.a. — not available. 

1 Acci6n Popular (Popular Action). 

2 Alianza Popular Revolucionaria Americana (American Popular Revolutionary Alliance). 

3 Acuerdo Socialista Izquierdista (Leftist Socialist Accord). 

4 Frente Democratico (Democratic Front). 

5 Izquierda Unida (United Left). 

6 Movimiento Independiente de Obras (Independent Works Movement). 

7 Partido Popular Cristiano (Popular Christian Party). 



333 



Peru: A Country Study 



Table 24. Major Army Equipment, 1992 



Type and Description 



Country 
of Origin 



In 

Inventory 



Main battle tanks 

T-54/T-55/T-62 Soviet Union 

Light tanks 

AMX-13 France 

Armored reconnaissance vehicles 

M-8 (M-200 version) United States 

Fiat 6616 Italy 

BRDM-2 Soviet Union 

Armored personnel carriers 

M-113 United States 

UR-416 West 

Germany 

Artillery 

Model M- 116, 75mm United States 

Model 56 pack, 105mm -do- 

M-101, 105mm -do- 

D-30, 122mm n.a. 

BM-21, 122mm n.a. 

M-46, 130mm Soviet Union 

M-54, 130mm Bofors Sweden 

M-114, 155mm United States 

M-109A2, 155mm -do- 

Mk F3, 155mm France 

Mortars 

81mm n.a. 

107mm n.a. 

120mm Brandt France 

Recoilless rifles 

M-40A1, 105mm and 106mm United States 

Antiaircraft guns 

ZSU-23-4, 23mm Soviet Union 

Towed, 40mm Bofors L60/70 Sweden 

Surface-to-air missiles 

SA-3/SA-7 Soviet Union 

Aircraft 

Cessna 182 United States 

Cessna 185 -do- 
Cessna U206 -do- 
Cessna 337 -do- 
Beech Queen Air 65 -do- 

U-10 -do- 

U-17 -do- 



300 



110 



60 
20 
15 



300 
225 



12 
50 
130 
30 
14 
30 
30 
36 
12 
12 



n.a. 
n.a. 
300 



35 
40 



12 



334 



Appendix 



Table 24 — Continued 



Country In 
Type and Description of Origin Inventory 

Helicopters 

Bell 47G United States 2 

Mi-6 Soviet Union 2 

Mi-8 -do- 28 

Mi-17 -do- 14 

Aerospatiale SA-318C France 3 

SA-315 France 6 

SA-316 -do- 5 

SA-318 -do- 3 

Agusta A- 109 Italy 2 

n.a. — not available. 

Source: Based on information from Tecnologia Militar [Bonn], No. 4, July-August 1990, 
52; and The Military Balance, 1992-1993, London, 1992, 185. 



Table 25. Armed Forces Personnel Strength, 
Selected Years, 1829-1992 



Army Air Force 



Year 


Personnel 


Year 


Personnel 


Year 


Personnel 


1829 


, , , . 8,000 


1925 


301 


1934 . . 


2,449 


1841 


.... 5,400 


1927 


61 


1944 . . 


3,500 


1851 


6,000 


1929 , 


175 


1958 . . 


1,000 


1872 , , 


4,500 


1930 


600 


1970 . . 


7,200 


1879 


5,241 


1939 


1,600 


1977 .. 


10,000 


1881 


33,500 


1941 


4,639 


1984 . . 


20,500 


1926 


7,556 


1947 .... 


4,000 


1990 . . 


25,000 


1930 


. . , 9,045 


1980 


9,500 


1992 . . 


22,000 


1935 


.... 15,000 


1990 .... 


15,000 






1940 


15,273 


1992 


15,000 






1941 


.... 31,578 










1951 


.... 32,000 










1960 


55,000 










1982 , , , 


75,000 










1990 .... 


80,000 










1992 , , 


.... 75,000 











Source: Based on information from Adrian J. English, Armed Forces of Latin America, Lon- 
don, 1984, 366-408; and The Military Balance, 1992-1993, London, 1992, 185-86. 



335 



Peru: A Country Study 



Table 26. Major Naval Equipment, 1992 



Type and Description 



Country 
of Origin 



In 

Inventory 



Navy 

Patrol and coastal combatants 

Support 

River and lake flotillas 

Missile combatants 

Velarde-class fast patrol craft 

Amphibious craft 

Paita (former U.S.S. Terrebonne Parish 
class) 

Principal surface combatants 
Cruisers 

Almirante Grau (De Ruyter class) . . . 
Aguirre (De Zeven Provincien class) . 

Destroyers 

Palacios (Daring class) 

Bolognesi (Friesland class) 

Frigates 

Meliton Carvajal (Lupo class) 

Manuel Villavicencio (Lupo class) .... 
Montonero (Lupo class) 

Submarines 

Casma class (Type T-209/1200) 

La Pedrera (Guppy IA class) 

Abtao (Mackerel class) 

Oceanography vessels 

Unanue (former U.S.S. Sotoyomo) . . . 
Carrillo 



n.a. 
n.a. 

France 



United States 



Netherlands 
-do- 



Britain 
Netherlands 



Italy 
-do- 
-do- 



West Germany 
United States 
-do- 



-do- 
n.a. 



Naval Aviation 

Antisubmarine warfare and marine 
reconnaissance aircraft 

S-2E 

SG 

Super King Air B 200T 

Helicopters 

Bell AB-212 ASW 

SH-3D Sea King 

UH-1D 

SA-319 Alouette III 

Transport 

C-47 Dakota 

C-47 Hercules 

Liaison 

Bell 206B 



United States 



-do- 
-do- 
-do- 
France 



United States 
-do- 



-do- 



336 



Appendix 



Table 26 — Continued 





Country 


In 


Type and Description 


of Origin 


Inventory 


Training 








United States 


2 


Beech T-34C 


-do- 


5 


n.a. — not available. 






Source: Based on information from The Military Balance, 1992-1993, London, 1992, 185-86. 


1 able //. JVLajOT Air 


rorce rLquipment, IzfyZ 






Country 


In 


Type and Description 


of Origin 


Inventory 


Bombers 






Canberra B-2 


Britain 


30 


A n 1. • Ca. 

Attack group aircraft 






Sukhoi Su-22 Fitter 


. . Soviet Union 


41 




United States 


25 


Fixed-wing fighters 






Mirage 2000P 


France 


10 


Mirage DP 


-do- 


2 




-do- 


14 


Trainers 








United States 


2 


Cessna T-37B/C 


-do- 


25 


Cessna T-41A/A/D Mescalero 


-do- 


35 


EMB-312 Tucano 


Brazil 


29 


Aermacchi MB-339A 


Italy 


13 


SU-22 Uti 


Soviet Union 


4 


Tankers 






Boeing KC 707-323C 


United States 


1 


Transports 






An-26 


. . Soviet Union 


n.a. 


An-32 


-do- 


14 


C-130A 


United States 


4 


C-130D 


-do- 


6 


Lockheed L- 100-20 


-do- 


5 


DC-8-62F 


-do- 


2 


DHC-5 Buffalo 


-do- 


12 


DHC-6 Twin Otter 


-do- 


8 


Douglas C-47 


-do- 


6 


FH-227 (F-27) 


-do- 


1 


PC-6 Turbo Porter 


Switzerland 


9 


Harbin Y-12 


China 


6 



337 



Peru: A Country Study 



Table 27 — Continued 



Type and Description 



Country 
of Origin 



In 

Inventory 



Reconnaissance 

Gates Learjet 25B United States 2 

36A Halcon (C-101) Argentina 2 

Presidential fleet 

Fokker F-28 MklOOO Sweden 1 

Dessault/Breguet Falcon 20F France 1 

Liaison 

Beech 99 United States 2 

Cessna 185 -do- 3 

Cessna 320 -do- 1 

Beech Queen Air 80 -do- 15 

King Air 90 -do- 3 

PA-31T n.a. 1 

Liaison helicopters 

UH-1D Iroquois United States 8 

Training helicopters 

Bell 47G -do- 12 

Attack helicopters 

Mi-25 Soviet Union 10 

Helicopters 

Bell 206 United States 8 

Bell 212 -do- 15 

Bell 214 -do- 5 

Bell 412 -do- 1 

MBB Bo-105C West Germany 10 

Mi-6 Hook Soviet Union 5 

Mi-8 Hip -do- 5 

Aerospatiale SA-316B France 5 

Aerospatiale Alouette III -do- 10 

Missiles 

AS-30 n.a. n.a. 

AA-2 Atoll n.a. n.a. 

R-550 Magic n.a. n.a. 

SA-2 Soviet Union 3 

SA-3 -do- 6 

Missile launchers 

SA-2 -do- 18 

SA-3 -do- 24 

n.a. — not available. 

Source: Based on information from The Military Balance, 1992-1993, London, 1992, 186; 
and Tecnologta Militar [Bonn], No. 4, 1990, 52. 



338 



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Woy-Hazelton, Sandra, and William A. Hazelton. "Shining Path 
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Semanal [Lima]; Si [Lima]; and Washington Post.) 



377 



Glossary 



Alliance for Progress — Established in 1961 at a hemispheric meet- 
ing in Punta del Este, Uruguay, under the leadership of Presi- 
dent John F. Kennedy as a long-range program to help develop 
and modernize Latin American states. Program involved vari- 
ous forms of foreign aid from the United States to all states 
of Latin America and the Caribbean, except Cuba. Its main 
instruments for fostering modernization were development loans 
offered at very low or zero interest rates. Program called for 
multisectoral reforms, particularly in health and education. 

Andean Initiative (or Andean Strategy) — At the February 1990 
Cartagena (Colombia) Drug Summit, the presidents of Bolivia, 
Colombia, Peru, and the United States agreed to mount a 
regional attack on the drug trade. Their governments thereby 
qualified for United States counternarcotics assistance. After 
taking office in July 1990, President Alberto K. Fujimori pro- 
posed a comprehensive counternarcotics effort, to include nar- 
cotics law enforcement, demand reduction, public diplomacy, 
and economic development. However, progress in organizing 
this strategy was hindered by police/military rivalries and cor- 
ruption. Furthermore, in late September 1990 Fujimori turned 
down US$35.9 million in authorized United States military/ 
antidrug assistance after the United States failed to meet his 
concerns about the military focus of its antidrug strategy in 
Peru. After extensive talks, Fujimori signed the Peru-United 
States umbrella agreement on drug control and economic as- 
sistance on May 14, 1991, establishing a political understand- 
ing at the highest level and serving as a framework for a 
coordinated, comprehensive program to dismantle the drug 
trade in Peru with assistance of the United States, other devel- 
oped countries, and international organizations. It addresses 
the role of the police and military in counternarcotics activi- 
ties, alternative economic assistance, crop substitution, and ac- 
cess to establishing legitimate economies versus the cultivation 
and illicit processing of coca leaf into cocaine products. 

Andean Pact — An economic group, the Andean Common Mar- 
ket, created in 1969 by Bolivia, Colombia, Chile, Ecuador, and 
Peru as a subregional market to improve its members' bar- 
gaining power within the Latin American Free Trade Associ- 
ation (LAFTA) and to encourage increased trade and more 
rapid development. LAFTA, which dated from 1960, was 



379 



Peru: A Country Study 



replaced in 1980 by the Latin American Integration Associa- 
tion (Asociacion Latinoamericana de Integracion — ALADI), 
which advocated a regional tariff preference for goods originat- 
ing in member states. Chile left the Pact in 1976. The threat 
that Peru might withdraw from the Pact had receded by August 
1992. 

audiencia — A high court of justice, exercising some administrative 
and executive functions in the colonial period. 

ayllu — A self-governing and land-owning peasant community in 
the Andean highlands. May refer to either a village, a kinship 
group, or a class-like organization, usually based on collective 
agriculture. Although a pre-Columbian term, ayllu has been 
used as a synonym for contemporary highland Peasant Com- 
munities. 

Baker debt-reduction plan — As part of the Enterprise for the Ameri- 
cas Initiative (q.v.), Nicholas F. Brady, the United States secre- 
tary of the treasury in the administration of President George 
H.W. Bush (1989-93), led a United States Government inter- 
agency process that determined country eligibility for debt 
reduction. The Brady Plan has been used to forge agreements 
between banks and the governments of several Latin Ameri- 
can nations. 

barriadas — Squatter setdements or shanty towns that surround Lima 
and other urban centers. Since the late 1960s, these settlements 
have been also known as pueblos jovenes (young towns). 

cabildo — A town council in the colonial period, usually composed 
of the most prominent citizens. 

cholo — A term that has a variety of definitions and social implica- 
tions. During colonial times, it was equivalent to mestizo but 
has evolved to include persons of mixed or pure native Ameri- 
can ancestry who are trying to move up the social and economic 
ladder by observing various Hispanic cultural norms. Cholos 
speak Spanish in addition to an indigenous language. Cholofica- 
cion (Cholofication) refers to the transition process from native 
American to mestizo status. 

compadrazgo — Literally, copaternity. A system of ritual coparent- 
hood that links parents, children, and godparents in a close 
social or economic relationship. 

consumer price index (CPI) — A statistical measure of sustained 
change in the price level weighted according to spending 
patterns. 

Contadora Support Group — A diplomatic initiative launched by a 
January 1983 meeting on Contadora Island off the Pacific coast 
of Panama, by which the "Core Four" mediator countries of 



380 



Glossary 



Mexico, Venezuela, Colombia, and Panama sought to prevent 
through negotiations a regional conflagration among the Cen- 
tral American states of Guatemala, El Salvador, Honduras, 
Nicaragua, and Costa Rica. In September 1984, the negotiat- 
ing process produced a draft treaty, the Contadora Act, which 
was judged acceptable by the government of Nicaragua but 
rejected by the other four Central American states concerned. 
The governments of Peru, Uruguay, Argentina, and Brazil 
formed the Contadora Support Group in 1985 in an effort to 
revitalize the faltering talks. The process was suspended un- 
officially in June 1986 when the Central American governments 
refused to sign a revised treaty. The Contadora process was 
effectively superseded by direct negotiations among the Cen- 
tral American states, 
corporatist — An adherent to corporatism, a sociopolitical philosophy 
that found its most developed expression in Italy under Benito 
Mussolini. Corporatism is antithetical to both Marxist and lib- 
eral democratic political ideals. A corporatist would organize 
society into industrial and professional corporations that serve 
as organs of political representation within a hierarchical, cen- 
tralized polity. 

corregidores de indios — Magistrates or chief officers, usually a white 
or cholo (q.v.), in preindependence Peru charged with ad- 
ministering local native American affairs in corregimientos (q.v.). 

corregimientos — Colonial administrative districts that later became 
intendencias (intendancies or provinces) and Catholic dioceses 
or parishes. 

dependency analysis — A theory that seeks to explain the continu- 
ing problems of Latin American underdevelopment and polit- 
ical conflict by positing the existence of an imperialistic, 
exploitative relationship between the industrialized countries 
and the developing nations of Latin America and other develop- 
ing regions. 

Economic Commission for Latin America and the Caribbean 
(ECLAC) — A United Nations regional economic commission 
established in 1948 as the Economic Commission for Latin 
America (EC LA). In 1984 expanded its operations and title 
to include the Caribbean. Main functions are to initiate and 
coordinate policies aimed at promoting economic development. 
In addition to the countries of Latin America and the Carib- 
bean, ECLAC 's forty-one members in 1992 included Britain, 
Canada, France, the Netherlands, Portugal, Spain, and the 
United States. There were an additional five Caribbean asso- 
ciate members. 



381 



Peru: A Country Study 



economies of scale — Decreases in the unit cost of production as- 
sociated with increasing output. 

effective protection — The percentage increase in value added, com- 
pared with what it could have been at international prices, as 
a result of the higher domestic prices permitted by protection. 

encomenderos — Colonial grantees, usually large landowners, to rights 
over native American labor and tribute in exchange for assum- 
ing responsibility to protect and Christianize these native 
subjects. 

encomienda(s) — A system adopted in 1503 whereby the Spanish 
Crown assigned rights over native American labor and trib- 
ute in the Spanish American colonies to individual colonists 
(encomenderos) in return for protecting and Christianizing their 
subjects. However, most ended up as virtual slaves with no 
recognized rights. The system was not ended until late in the 
eighteenth century. 

Enterprise for the Americas Initiative — A plan announced by Presi- 
dent George H.W. Bush on June 27, 1990, calling for the 
United States to negotiate agreements with selected Latin 
American countries to reduce their official debt to the United 
States and make funds available through the restructuring for 
environmental programs, to stimulate private investment, and 
to take steps to promote extensive trade liberalization with the 
goal of establishing free trade throughout the Western Hemi- 
sphere. 

export-led growth — An economic development strategy that em- 
phasizes export promotion as the engine of economic growth. 
Proponents of this strategy emphasize the correlation between 
growth in exports and growth in the aggregate economy. 

fiscal year (FY) — Calendar year. 

gamonales (sing, gamonal) — Ruthless rural bosses who used armed 
force as well as the law to obtain land, displacing many native 
Americans in the process. 

gross domestic product (GDP) — A measure of the total value of 
goods and services produced by the domestic economy during 
a given period, usually one year. Obtained by adding the value 
contributed by each sector of the economy in the form of profits, 
compensation to employees, and depreciation (consumption of 
capital). The income arising from investments and possessions 
owned abroad is not included, hence the use of the word domestic 
to distinguish GDP from gross national product (q.v.). 

gross national product (GNP) — Total market value of all final goods 
and services produced by an economy during a year. Obtained 
by adding the gross domestic product (q.v.) and the income 



382 



Glossary 



received from abroad by residents less payments remitted 
abroad to nonresidents. 

Group of Eight — A permanent mechanism for consultation and 
political coordination that succeeded the Contadora Support 
Group (q.v.) in December 1986. It consisted of Argentina, 
Brazil, Colombia, Mexico, Panama, Peru, Uruguay, and 
Venezuela. Its second meeting, attended by the presidents of 
seven member-countries (Panama's membership was tempo- 
rarily suspended in February 1988), was held in Punta del Este, 
Uruguay, in October 1988. Like the Contadora Support Group, 
the Group of Eight advocated democracy and a negotiated so- 
lution to the Central American insurgencies. Its name was 
changed in 1990 to the Group of Rio, which had eleven mem- 
bers in 1992. Peru was suspended from the Rio Group follow- 
ing President Alberto K. Fujimori's self-coup on April 6, 1992, 
but was formally reinstated in April 1993. 

hacendado — Hacendados (owners of haciendas) often acted as in- 
termediaries for gamonales (q. v. ) in taking over native Ameri- 
can lands and extorting wool merchants. 

import-substitution industrialization — An economic development 
strategy that emphasizes the growth of domestic industries, often 
by import protection using tariff and nontariff measures. Propo- 
nents favor the export of industrial goods over primary prod- 
ucts. 

informal sector — Unofficial sector of underground economic ac- 
tivity beyond government regulation and taxation, to include 
street vendors in urban areas as well as coca-growers in rural 
areas . 

International Monetary Fund (IMF) — Established on July 22, 1944, 
the IMF began operating along with the World Bank (q.v.) 
on December 27, 1945. The IMF is a specialized agency af- 
filiated with the United Nations that takes responsibility for 
stabilizing international exchange rates and payments. The 
IMF's main business is the provision of loans to its members 
when they experience balance-of-payments difficulties. These 
loans often carry conditions that require substantial internal 
economic adjustments by the recipients. In 1992 the IMF had 
156 members. 

latifundios — Large estates held as private property, which may be 
farmed as plantations, by tenant sharecroppers, or as tradi- 
tional haciendas. The latifundio system (latifundismo) is a pat- 
tern of land ownership based on latifundios owned by local 
gentry, absentee landlords, and domestic or foreign corpo- 
rations. 



383 



Peru: A Country Study 

liberation theology— An activist movement led by Roman Catholic 
clergy who traced their inspiration to Vatican Council II (1965), 
where some church procedures were liberalized, and the Sec- 
ond Latin American Bishops' Conference in Medellin (1966), 
which endorsed greater direct efforts to improve the lot of the 
poor. Advocates of liberation theology, sometimes referred to 
as "liberationists," have worked mainly through Christian Base 
Communities (Comunidades Eclesiasticas de Base — CEBs). 

licenciado — A person granted a higher degree in a university; also 
a title bestowed on lawyers. 

machismo — Cult of male dominance, derived from the word macho, 
meaning male. 

marginality — A concept used to explain the poor political, eco- 
nomic, and social conditions of individuals within a society, 
social classes within a nation, or nations within the larger world 
community. It refers often to poverty-stricken groups left be- 
hind in the modernization process. They are not integrated into 
the socioeconomic system, and their relative poverty increases. 
Marginality is sometimes referred to as dualism or the dual- 
society thesis. 

mayorazgo — Colonial system whereby the elder son inherited the tides 
and properties of the family. 

mayordomos — Special officials in colonial Peru appointed, sometimes 
under threat of physical punishment for refusal, for important 
celebrations. Their duties included making sure the priest's pay 
was available and making up shortages out of their personal 
patrimony. 

Mercosur — (Mercado Comun del Cono Sur — Southern Cone Com- 
mon Market) — An organization established on March 26, 1991 , 
by Argentina, Brazil, Paraguay, and Uruguay for the purpose 
of promoting regional economic cooperation. Chile was con- 
spicuously absent because of its insistence that the other four 
countries first had to lower their tariffs to the Chilean level be- 
fore Chile could join. Mercosur aimed to form a common mar- 
ket by December 31 , 1994. Bolivia hoped to eventually become 
a fifth member. 

mestizo — Originally, term designated the offspring of a Spaniard 
and a native American. It now means any obviously nonwhite 
individual who is fluent in Spanish and observes Hispanic cul- 
tural norms. 

minifundios — Very small landholdings, legally held, allowing only 

a bare existence. 
mita system — A colonial system whereby all taxpayers had to work 

a prescribed number of days annually in the mita, or labor pool, 



384 



Glossary 



to run the households of local leaders. Each taxpayer could be 
called up by his or her curaca (chief) to work on imperial or 
local projects at any convenient time. 
mita de minas — A compulsory labor system implemented by the 
Spaniards to work the mines. Required that all able-bodied na- 
tive American men present themselves periodically for short 
periods of paid work in the mines. System led to abuses: in- 
humane treatment of the conscripts, arbitrary extensions of the 
service period, and depletion of adult males from individual 
communities. 

obrajes — Rudimentary textile factories set up throughout the high- 
lands in the colonial period to pay the tribute owed to encomiendas 
(q.v.). 

Organization of American States (OAS) — Established by the Ninth 
International Conference of American States held in Bogota 
on April 30, 1948, and effective since December 13, 1951, the 
OAS has served as a major regional organization composed 
of thirty-five members, including most Latin American states 
and the United States and Canada. Determines common po- 
litical, defense, economic, and social policies and provides for 
coordination of various inter- American agencies. Responsible 
for implementing the Inter- American Treaty of Reciprocal As- 
sistance (Rio Treaty) (q. v. ) when any threat to the security of 
the region arises. 

patron — Usually a large landowner who is called on to provide his 
workers land, water, and sometimes materials and/or equip- 
ment and salary payments, as well as protection from outsiders, 
including local officials, and even from fellow workers. 

praetorian — Praetorianism is a form of militarism in which the 
armed forces act as a corporate body to maintain control over 
government, actively intervening in politics to select or change 
the government. The "ruler-type" praetorian army rejects the 
existing social order for one based on modernization, indus- 
trialization, and rapid economic growth, as the Peruvian Army 
(Ejercito Peruano — EP) did following its assumption of power 
in 1968. Political scientist Samuel Huntington describes a 
praetorian society as one in which social forces confront each 
other directly, with no institutions accepted as legitimate medi- 
aries and, more importantly, no agreement existing among the 
groups as to an authoritative means for conflict resolution. 

primary exports — Peru's traditional primary goods exports, as op- 
posed to manufactured exports, included cotton, sugar, cop- 
per, silver, lead, zinc, and oil. 



385 



Peru: A Country Study 

Protocol of Rio de Janeiro (Rio Protocol) — An agreement concluded 
in Rio de Janeiro on January 29, 1942, between Peru and Ec- 
uador with the participation of the mediatory nations of 
Argentina, Brazil, and the United States. It was ratified by the 
congresses of both Peru and Ecuador on February 26, 1942, 
and it established the border between the two countries as in- 
ternationally recognized today. Following the discovery of the 
Rio Cenepa between the Zamora and Santiago rivers in the 
Cordillera del Condor in 1951, Ecuador disputed the treaty 
demarcation, which then stopped, leaving a stretch of the border 
uncharted. Ecuador repudiated the treaty in 1960, but the 
guarantor powers ruled this repudiation invalid. 

pueblos jdvenes — See barriadas. 

real exchange rate — The value of foreign exchange corrected for 
differences between external and domestic inflation. 

reducciones — Viceroy Francisco de Toledo's orders created hundreds 
of these colonial settlements for only native Americans. 
Although conveniently located in the flat valley bottoms, these 
settlements were established in areas subject to floods and 
avalanches. Their governing personnel consisted only of na- 
tive Americans. 

repartimiento — State monopoly of selling inferior goods at inflated 
prices to conquered native Americans. Set off a wave of vio- 
lent protests in 1776. 

residencia — A formal inquiry conducted at the end of a colonial offi- 
cial's term of office. 

Rio Group — See Group of Eight. 

Rio Protocol — See Protocol of Rio de Janeiro. 

Rio Treaty (Inter- American Treaty of Reciprocal Assistance) — A 
regional alliance, signed in Rio de Janeiro on September 2, 
1947, that established a mutual security system to safeguard 
the Western Hemisphere from aggression from within or out- 
side the zone. Signatories include the United States and twenty 
Latin American republics. In 1975 a special conference ap- 
proved, over United States objections, a Protocol of Amend- 
ment to the Rio Treaty that, once ratified, would establish the 
principle of " ideological pluralism" and would simplify the re- 
scinding of sanctions imposed on an aggressor party. 

slash-and-burn agriculture — Method of cultivation whereby areas 
of the forest are burned and cleared for planting, the ash provid- 
ing some fertilization. Area is cultivated for several years and 
then left fallow for a decade or longer. 

sol (S/) — Peru's unit of currency, technically the nuevo sol (new 
sol), consisting of 100 centimos, established officially as Peru's 



386 



Glossary 



monetary unit on January 4, 1991 . In late 1992, the exchange 
rate for the new sol was S/1.63 = US$1. In the late 1800s, a 
silver sol was the country's currency until its metallic content 
exceeded its monetary value and it was exported instead of cir- 
culating. Before the 1860s, Bolivian coins circulated in Peru. 
The sol was established by law in 1931 as an unminted gold 
coin; bank notes were issued in terms of gold soles. It replaced 
the Peruvian gold pound created in 1900. The Peruvian pound 
was equivalent in value to the British pound, and both circu- 
lated as legal tender. Beginning in 1975, the value of the sol 
declined continuously as officials attempted to adjust the ex- 
change rate to the rate of inflation. By mid- 1985 the sol had 
deteriorated to more than S/l 1 ,900 per US$1 , when a new unit 
of currency, the inti (equivalent to S/l, 000), was introduced. 
By 1990 US$1 equaled about 188,000 intis. Consequently, 
President Fujimori adopted the new sol, equivalent to 1 mil- 
lion inti, in July 1991 . The free exchange rate in Peruvian cur- 
rency in February 1993 was 2,100 new soles to the dollar, 
terms of trade — The relationship between the price of primary ex- 
ports and the price of manufactured goods. May be defined 
as the ratio of the average price of a country's exports to the 
average price of its imports. In international economics, the 
concept of "terms of trade" plays an important role in evalu- 
ating exchange relationships between developed and develop- 
ing nations. 

value-added tax (VAT) — An incremental tax applied to the value 
added at each stage of the processing of a raw material or the 
production and distribution of a commodity. It is calculated 
as the difference between the product value at a given state and 
the cost of all materials and services purchased as inputs. The 
value-added tax is a form of indirect taxation, and its impact 
on the ultimate consumer is the same as that of a sales tax. 

World Bank — Informal name used to designate a group of four 
affiliated international institutions: International Bank for 
Reconstruction and Development (IBRD), International De- 
velopment Association (IDA), International Finance Corpo- 
ration (IFC), and Multilateral Investment Guarantee Agency 
(MIGA). IBRD, established in 1945, has the primary purpose 
of providing loans at market- related rates of interest to develop- 
ing countries at more advanced stages of development. IDA, 
a legally separate loan fund administered by the staff of IBRD, 
was set up in 1960 to furnish credits to the poorest developing 
countries on much easier terms than those of conventional 
IBRD loans. IFC, founded in 1956, supplements the activities 



387 



Peru: A Country Study 



of IBRD through loans and assistance designed specifically to 
encourage the growth of productive private enterprises in less 
developed countries. MIGA, founded in 1988, insures private 
foreign investment in developing countries against various non- 
commercial risks. The president and certain senior officers of 
IBRD hold the same positions in the IFC. The four institu- 
tions are owned by the governments of the countries that sub- 
scribe their capital. To participate in the World Bank group, 
member states must first belong to IMF (q.v.). 



388 



Contributors 



Paul L. Doughty is Professor of Anthropology and Latin Ameri- 
can Studies, Department of Anthropology, University of Flor- 
ida, Gainesville. 

Carol Graham is Guest Scholar in the Foreign Policy Studies Pro- 
gram, Brookings Institution, and Adjunct Professor of Govern- 
ment, Georgetown University, Washington, D.C. 

Rex A. Hudson is Senior Research Specialist in Latin American 
Affairs, Federal Research Division, Library of Congress, 
Washington, D.C. 

Peter F. Klaren is Professor of History and International Affairs 
and Director of the Latin American Studies Program, George 
Washington University, Washington, D.C. 

David Scott Palmer is Professor of International Relations and 
Political Science, Center for International Relations, Boston 
University, and Director of its Latin American Studies 
Program. 

John Sheahan is William Brough Professor of Economics, Depart- 
ment of Economics, Williams College, Williamstown, Massa- 
chusetts. 



389 



Index 



abortion: clandestine, 85; incidence of, 
85-86 

Academia de la Magistratura. See School 
for Magistrates 

Accion Popular. See Popular Action 

acquired immune deficiency syndrome 
(AIDS), xvii 

Acuerdo Socialista Izquierdista. See Leftist 
Socialist Accord 

Administradoras de Fondos de Pensiones. 
See Private Pension Funds Adminis- 
trators 

Advanced Military Studies Center (Cen- 
tro de Altos Estudios Militares — 
CAEM), 230, 270, 279; founded, 275; 
training in, 282 

Aermacchi. See Macchi Aviation Com- 
pany, 287 

Aeronautical Instruction Center Com- 
mand, 281 

Aeronautica Macchi. See Macchi Aviation 
Company 

Aeronautics Industry Public Enterprise 
(Empresa Publica de la Industria Aero- 
nautica — Indaer-Peru), 287 
Aeronaves del Peru. See Airlines of Peru 
Aeroperu. See Air Transport Company of 
Peru 

Afro-Peruvians, 81; geographic distribu- 
tion of, 99; in Lima, 99; as percentage 
of population, 95; racism against, 109; 
social status of, 99 
agrarian reform. See land reform 
Agrarian Reform Law (1969), 48, 62, 74, 
230; amended, 160; elite under, 105-6; 
encomienda system abolished by, 102, 
181; impact of, on families, 117; ineffi- 
ciency under, 77, 148; and native Amer- 
icans, 99 

agricultural: credit, 193, 197; diversifica- 
tion, 22-23; technology, 84 

agricultural production, 74; attempts to 
improve, 147; cocaine industry as per- 
centage of, 146; in cooperatives, 50; 
decline of, 195; distribution of, 76, 77; 
econometric study of, 148-49; effect of 
urban migration on, 84; impact of in- 
surgency on, 126; increase in, 193; ob- 



stacles to increasing, 147; per capita, 
147; total, 147 

agricultural products (see also under in- 
dividual crops): coca, 23, 170; cotton, 23, 
74; export of, 64, 147, 167; grain, 23, 
68; maize, 6, 9; potatoes, 9, 23, 68; 
quinoa, 9; of Sierra region, 68; under 
Spanish rule, 23; subsidies for, 193; 
sugar, 23, 74 

agriculture (see also farming), 147-49; in 
Andean valleys, 68, 74-76; attempts to 
modernize, li; balance of trade for, 147; 
development of, 64; labor force in, 175, 
176; multicropping, 78; native crops, 
64; negative effects of economy on, 149; 
output of, 147; as percentage of gross 
domestic product, 145-46; plantation, 
74; in pre-Incan cultures, 6; profitabil- 
ity of, xxxiii; promotion of, 192; slash- 
and-burn, 78-79; value added by coca, 
170 

Aguaruna people, 71 

AID. See United States Agency for Inter- 
national Development 

AIDS. See acquired immune deficiency 
syndrome 

aircraft, 164 

air force. See Peruvian Air Force 
Airlines of Peru (Aeronaves del Peru), 164 
airports, 164 

Air Technical Training School, 281 
Air Transport Company of Peru (Em- 
presa de Transporte Aereo del Peru — 
Aeroperu): as air force auxiliary, 288; 
plans to privatize, 164 
Air University, 281 

Alianza Popular Revolucionaria Ameri- 
cana. See American Popular Revolu- 
tionary Alliance 

Allen, Catherine, 70 

Alliance for Progress, 48 

Almagro, Diego de, 14; dispute of, with 
Pizarro, 15-16, 266; executed, 16 

Almirante Grau, 268 

alpacas, 63, 68, 115, 120 

Altamirano, Teofilo, 62, 91 

Alva Castro, Luis, 225, 243, 246 

Amat y Leon y Chavez, Carlos, 250 



391 



Peru: A Country Study 



Amazonas Department: native Americans 
in, 99 

Amazon Basin: efforts to develop, 87 

Amazon River, xxi, 63 

Amazon River Force, 284, 285 

American Popular Revolutionary Alliance 
(Alianza Popular Revolucionaria Ameri- 
cana— APRA), 41, 48, 225, 269; alli- 
ance of, with Fujimori government, 
250-51 ; in campaign of 1990, 245, 246, 
247; corruption in, 245; dissatisfaction 
with, 247; election results of, lii, 56; 
founded, 177, 225; ideological volatility 
of, 225; legalized, 45; loyalty to, 225; 
military opposition to, 303; as national 
security threat, 303; opposition of, to 
Fujimori government, 251; outlawed, 
43-44; persecuted, 43-44; platform of, 
44, 47, 225; political power of, 221; 
regional representation in, xliii, 94; role 
of, 41; support by, for migrants, 90; sup- 
pressed, 270; toleration of, 44 

Americas Watch, liv 

Amnesty International, xxxviii 

Ancash: Incas in, 6 

Ancash Department: agriculture in, 77 

Ancash uprising, 124 

anchovy, 72, 149-50 

Andean Initiative, 256, 276 

Andeanization, xxix, xxx, 4 

Andean Pact (1969), 51, 186, 253 

Andrien, Kenneth J., 22 

Angola, 254 

Antiaircraft Defense and Revolutionary 
Air Force of Cuba, 276 

AP. See Popular Action 

Apemipe. See Peruvian Association of 
Small- and Medium-Sized Businesses 

Apoyo polls, xxxiii, xxxvii, xl, xliii, lvi 

APRA. See American Popular Revolu- 
tionary Alliance 

Aprodeh. See Pro-Human Rights Asso- 
ciation 

Apurimac River, 70 

aqueducts, 67 

Aramburu, Carlos E., 108, 116 

archaeological research, 7 

Arciniega Huby, Alberto, xlviii-xlviv, 309 

Arequipa, 82; decline in prestige of, 25; 
migration to, xxxv, 87; wine produc- 
tion in, 23 

Argentina: as guarantor of Rio Protocol, 
302; independence of, 28; reaction of, 



to autogolpe, 255; war with, 302 

Arica Province, 35, 268 

Aristocratic Republic (1895-1914), 37-38 

armed forces (Fuerzas Armadas — FF.AA.) 
(see also military; see also under individual 
branches): alignment of, with oligarchy, 38; 
autonomy of, 231, 232; under Belaunde 
administration, 231; chain of command 
in, 278; civic action role of, 270, 276; 
under constitution of 1979, 273-74; cor- 
ruption in, 293; coups d'etat by, 4; 
deaths in, by insurgents, 264, 293, 308; 
deployment of, 294; effect of economic 
crisis on, 289-92; effect of inflation on, 
289-92; and elite class, 269-70; fight- 
ing terrorism, 293; under Fujimori ad- 
ministration, xlvii, 232; under Garcia 
administration, 231; government reli- 
ance on, 251; growth of, 262; human 
rights violations by, xxxv, 308, 314-15; 
intelligence services and, 279; missions 
of, 279-80; modernization of, 270; op- 
position to American Popular Revolu- 
tionary Alliance, 303; organization of, 
279-80; patron saint of, 120; pay and 
benefits in, xlvii, 262, 292; perceptions 
of, xli, 231; political influences on, 270; 
political role of, xlvii, 41, 230-32, 261, 
270-72, 273, 277-78; president as com- 
mander in chief of, xlvii, 213, 274, 278, 
294; professionalization of, 38, 269, 270; 
as protector of democracy, 272-73; read- 
iness status of, 292; rebuilding of, 275; 
reform by, 270- 72, 304; restrictions on, 
274; size of, 262; support of, for Fuji- 
mori, 208; tensions of, with government, 
231; tensions of, with police, 300; train- 
ing, domestic, 262, 279-82; training, 
foreign, xxxix, 263, 277; uniforms, 
ranks, and insignia, 288-89; voting by, 
274; women in, 279-81 

army. See Peruvian Army 

Army Advanced Technical School (Escuela 
Superior Tecnica del Ejercito — ESTE), 
279 

Army of the Andes, 28 
Army Reserve (Reserva), 282 
Aronson, Bernard W., xli 
Ashaninka (Campa) people, xxxvii, 71 
ASI. See Leftist Socialist Accord 
Asociacion Peruana de Empresas Medias 
y Pequenas. See Peruvian Association of 
Small- and Medium-Sized Businesses 



392 



Index 



Asociacion Pro-Derechos Humanos. See 
Pro-Human Rights Association 

Assadourian Sempat, Carlos, 18, 21 

assassinations, 292-93; of clergy, 234; of 
community leaders, xxxviii; of jour- 
nalists, 1; of judges, 312; of mayors, lii, 
220; of military personnel, 255; of 
union leaders, 238 

Assembly of Catholic Bishops, 85 

Atacama Desert, 34 

Atahualpa, 12; executed, 14; rivalry of, 
with Huascar, 17 

A Theology of Liberation (Gutierrez), 118 

Atusparia, Pedro Pablo, 35, 124 

audiences (audiencias), 20 

audiencias. See audiences 

autogolpe of 1992, 208, 261; explanations 
for, xxxviii, 251; impact of, 251-52, 
293, 313; reaction to, xxxix, xl, xlii, 
xliii, 255, 293 

avalanches, 69, 73 

Ayacucho, 267 

Ayacucho Department: impact of insur- 
gency on, 126, 297-89; Shining Path 
activities in, 234, 305 

Ayacucho Prison: Shining Path raid on, 
315-16 

ayllu, 8-10, 19, 110 

Aymara people, 62; and Catholic Church, 
118 

Aymara language, 89, 96, 101, 128; as 

second language, 129 
ayni, 116 

Baker, James A., xxxix 
Baker debt-reduction plan, 253 
balance of payments, 165-74; deficits, 

139; under Garcia, 193, 194; problems 

with, 49 

balance of trade, 143; for agricultural sec- 
tor, 147 
Balta, Jose, 34 

Banco Central de Reservas. See Central 

Reserve Bank 
Banco de Lima, lv 

banking, 157-60; attempt to liberalize, 
160; attempt to nationalize, xxxi, 157- 
60, 188, 195, 216, 234, 243-44; foreign 
investment in, 50, 144; governing 
ownership in, 51 

banks: commercial, 160; credit, 160; for- 
eign, 160, 187; savings and loans, 160 



Bar of Lima, 217 

Barrantes Lingan, Alfonso, 227 

barriadas. See shanty towns 

Battle of Ayacucho, 267 

Battle of Iquique Bay, 34 

Battle of Junm (1824), 29, 267 

Battle of Salinas (1538), 16 

BCR. See Central Reserve Bank 

Bedoya Reyes, Luis, xxxi, 226 

Bejar Rivera, Hector, 304 

Belaunde Terry, Fernando, xxxi, xlv, 47, 
225, 227; in election of 1956, 270; in 
election of 1963, 48; in election of 1980, 
52, 242 

Belaunde administration, first (1963-68), 
xl, 106; corruption under, 50; deficit 
under, 173; development of Selva 
under, 71; economy under, 145, 211; 
education under, 239; nationalization 
under, 270; overthrown, 49, 211; pro- 
tectionism under, 186; programs of, 48 

Belaunde administration, second (^BO- 
SS), xl, 211; armed forces under, 23 1 ; 
decollectivization under, 148; develop- 
ment of Selva under, 7 1 ; drug traffick- 
ing under, 55; economy under, 140, 
191-92, 237; education under, 239; ex- 
ternal debt under, 140, 253; privatiza- 
tion under, 188; Shining Path under, 
54, 242 

Belco Petroleum Corporation: national- 
ized, 152, 188 
Belmont Cassinelli, Ricardo, lii, 229 
Benavides, Oscar Raimundo, 38; econ- 
omy under, 43; as president, 41, 43, 
303 

bilingualism, 128 

Billinghurst, Guillermo, 38, 269 

birth control: availability of, 85, 86; desire 
for, 85; distribution of, 86; opposition 
to, 85; use of, 85, 86; women's attitudes 
toward, 86 

Blanco, Hugo, 47, 304 

blancos, 80 

Bolivar Palacios, Simon, 3, 29; adminis- 
tration under, 30; role of, in indepen- 
dence, 266 

Bolivia, 225; border conflicts with, 267, 
302; diplomatic initiative with, 303 

Bolognesi, Francisco, 131 

Bolona Behr, Carlos, xxxiv, xlii, liii, 214 

Bonaparte, Joseph, 28, 266 

Bonaparte, Napoleon, 28, 266 



393 



Peru: A Country Study 



Bordaberry Arocena, Juan Maria, xlvii 

border problems: with Bolivia, 267, 302; 
with Chile, 303; with Colombia, 40, 43, 
267, 302; with Ecuador, 44, 55, 263, 
267, 302-3 

border security, 300, 301 

Bourbon reforms, 24, 266 

Brazil: cholera in, 256; as guarantor of 
Rio Protocol, 302 

Briones Davila, Juan Enrique, liv 

Britain: investment by, 35, 144, 268; 
materiel from, 278, 286 

Brooke Alexander Amendment, 254 

Brush, Stephen B., 76 

budget deficit, 172; under Belaunde, 173; 
under Fujimori, 196, 197; under Garcia, 
193, 244; as percentage of gross domes- 
tic product, 188, 193, 195, 196; as per- 
centage of gross national product, 190; 
quasi-fiscal, 195; reduced, 197; under 
Velasco, 186 

burros, 115 

Bush administration, xxxix, 256 
business: opposition of, to Vargas Llosa, 
234-36 

Bustamante y Rivero, Jose Luis, 45 



cabildo. See town council 

Caceres, Andres Avelina, 35, 268, 269; 

overthrown, 37; as president, 35 
CAEM. See Advanced Military Studies 

Center 

Caja de Ahorros de Lima. See Savings 
Bank of Lima 

Cajamarca: role of Catholic Church in, 
234; textile manufacturing in, 23 

Cajamarca, battle of, 13 

Callao, 94; port of, 163 

Callejon de Huaylas, 73 

Camara Nacional de Turismo. See Na- 
tional Tourism Board 

Cambio, 240 

Cambio '90 (Change '90), 208, 228; base 
of support for, 228, 246; campaign 
strategy of, xxxi-xxxii, 246 

Campa people. See Ashaninka people 

canals, 67, 76 

Canatur. See National Tourism Board 
Camet Dickman, Jorge, liii 
Candamo, Manuel, 37 
Canto Grande Prison, xlviii, 316 
Caparo, Carlos, 317 



capital: flight, 193; goods, 169 
CARE (Cooperative for American 

Relief), 134 
Caretas magazine, xliv, liv, 240 
Caritas (Catholic Relief Services), 233; 

food distribution by, 234 
Cartagena Agreement. See Andean Ini- 
tiative 

caste system, 80-81, 102; categories in, 
80; native Americans in, 100; and resi- 
dence, 82; sumptuary laws under, 80- 
81 

Castilla, Ramon, 31, 32, 209 

Castilla administration (1845-51), 209, 

267; economy under, 32-33; elite under, 

104; infrastructure under, 33; trade 

under, 32 
Castro Pozo, Hildebrando, 12 
Catholic Church. See Roman Catholic 

Church 

Catholic Relief Services. See Caritas 
Catholic University of Peru, 62 
cattle, 64, 68, 77 
caudillismo, 30 

caudillo era: civil wars under, 30; tribute 
under, 32 

Cayara massacre, 218 

Cayetano Heredia, 132 

CCD. See Democratic Constituent Con- 
gress 

CCFA. See Joint Command of the Armed 
Forces 

CDN. See National Defense Council 
CEN. See Naval Studies Center 
Central Bank. See Central Reserve Bank 
Central de Trabajadores de la Revolution 

Peruana. See Federation of Workers of 

the Peruvian Revolution 
Central Highway (Trans-Andean High- 
way), 163, 237 
Central Railroad, 160 
Central Reserve Bank (Banco Central de 

Reservas— BCR), liii, 135, 242, 250, 

292; agricultural credit from, 193, 197; 

credit from, 195; powers of, 160 
Centro de Altos Estudios Militares. See 

Advanced Military Studies Center 
Centro de Estudios Navales. See Naval 

Studies Center 
Centro de Instruction Militar Peruana. 

See Peruvian Military Instruction 

Center 



394 



Index 



Centro de Instruction Tecnica y Entrena- 
miento Naval. See Naval Technical and 
Training Center 

Cerro de Pasco: copper mine, 39; nation- 
alized, 152, 186; silver mine, 25 

Cerro de Pasco Railroad, 160 

chacras, 77 

Chan Chan, 7 

Change '90. See Cambio '90 

Charles III, 25 

Chavez Alvarez, Jorge, 250 

Chavfn, Kingdom of, 6 

Chavm de Huantar, 6 

Chiclayo: migration to, 87 

child mortality rate, xxxiv, 133, 134 

Chile, 254; cholera in, 256; contraband 
trade with, 255; as guarantor of Rio 
Protocol, 302; liberated, 28; nitrate 
works owned by, 268; relations with, 
263, 268; war with, 302 

Chimbote, 82; cholera outbreak in, 84; 
migration to, 83; pollution in, 84; 
population of, 83 

Chimbote Bay: pollution in, 83-84 

Chimu people, 6, 7-8; accomplishments 
of, 7; administration in, 7; agriculture 
in, 7-8; under Inca empire, 10; lan- 
guage of, 10 

China: foreign investment by, li; im- 
migrants from, 80 

Chincha Islands: guano production on, 
31; war with Spain over, 33, 267 

Chinese: in elite class, 106; immigrants, 99; 
laborers, 81; as percentage of population, 
95; racism against, 109; status of, 100 

cholera epidemic of 1991, 133, 165, 252; 
and foreign relations, 254, 255-56; ori- 
gins of, 84 

cholos, 62, 80, 109; migration of, 89 

Chorrillos Prison, 315, 317 

Christian Democratic Party (Partido 
Democrata Cristiano— PDC), 226; in 
election of 1963, 48; founded, 226; re- 
form within, 229; social base for, 47 

Chupacho people, 8 

Church of Jesus Christ of Latter-day 
Saints (Mormons), 121 

Cieza de Leon, Pedro de, 17 

CIMP. SVe Peruvian Military Instruction 
Center 

CITEN. See Naval Technical and Train- 
ing Center 
Civil Guard (Guardia Civil— GC), 294 



Civilista Party (Partido Civilista— PC), 33; 
revived, 37; social changes under, 37-38 

civil wars: in caudillo era, 30; in Inca em- 
pire, 12; under Spanish rule, 28 

Class Movement of Workers and Labor- 
ers (Movimiento de Obreros y Traba- 
jadores Clasistas— MOTC), 237-38 

Clavo, Margie ("Nancy"), xlv 

Clement, Paul, 275 

clergy: targeted for assassination, 234 

climate: in Costa, 67; rainfall, 67, 69; 
seasonal, 69; in Sierra, 68; tempera- 
ture, 67, 68 

Clinton, Bill, 1 

coast region. See Costa 

coca, 23; chewing, 55, 70; demand for, 
55; economic implications of, 170-72, 
181 ; number of growers of, 310; proces- 
sors, 310; uses of, 71 

cocaine: arrests for consumption of, 311; 
capitalism, 72; consumption of, 55, 
311; seized, 311 

cocaine industry, 140; as percentage of 
gross domestic product, 146 

coca production, xxxix, 55-56, 146, 170, 
261, 297; efforts to curtail, 56, 297, 
298, 299; environmental effects of, li, 
71; government attempts to curtail, 1, 
171-72; income from, 55-56, 171, 181; 
increase in, 1, li; legal, 311; number of 
people employed in, 310-11; outlawed, 
56; as percentage of gross domestic 
product, 170; pre-colonial, 55 

Code of Military Justice, 274 

Collier, David, 90 

Colombia: border problems with, 40, 43, 
267, 302; cholera in, 256; relations 
with, 43; drug traffickers from, 56 

Colon, Cristobal. See Columbus, Chris- 
topher 

Colonel Francisco Secada Vigneta Air- 
port, 164 

colonization program, 48 

Columbus, Christopher, 12 

Comaca (Commanders, Majors, and Cap- 
tains), xlviii 

Comando Conjunto de la Fuerza 
Armada. See Joint Command of the 
Armed Forces 

Commanders, Majors, and Captains. See 
Comaca 

commodity flows, 18, 170; including coca, 
170 



395 



Peru: A Country Study 



communications, 164-65 

Communist Party of Peru-Shining Path. 
See Shining Path 

compadrazgo. See godparenthood 

Compama de Aviacion Faucett. See Faucett 
Aviation Company 

Compama Peruana de Telefonos. See Peru- 
vian Telephone Company 

Comunidad Indigena. See Indigenous Com- 
munity 

Comunidades Campesinas. See Peasant 
Communities 

concertacion (national understanding) pro- 
gram, 192, 234, 237, 243 

Condorcanqui, Jose Gabriel {see also 
Tupac Amaru II), 27 

Confederacion General de Trabajadores 
del Peru. See General Confederation of 
Peruvian Workers 

Confederacion Nacional de Instituciones 
Empresariales Privadas. See National 
Confederation of Private Business 

Confederacion Trabajadores del Peru. See 
Confederation of Peruvian Workers 

Confederation of Peruvian Workers (Con- 
federacion de Trabajadores del Peru — 
CTP), 177, 236 

Confiep. See National Confederation of 
Private Business 

Congreso Constituyente Democratico. See 
Democratic Constituent Congress 

Congress: under constitution of 1860, 
211; under constitution of 1920, 211; 
dissolved by Fujimori, xxxviii, xl, 208; 
distrust of, xli; elections for, 222; ob- 
structionism by, xxxiii; purged by 
Leguia, 40 

conscription: initiated, 269; in pre-Incan 
cultures, 265; of women, 282-83 

conscripts: number of, 262, 282, 287; 
training of, 279 

Consejo Administrativo Provisional. See 
Provisional Administrative Council 

Consejo de Defensa Nacional. See Na- 
tional Defense Council 

consejo distrital. See district council 

consejo municipal. See municipal council 

Constituent Assembly (1978-80), 52, 212, 
227 

constitutional development, 208-12 
constitution: of 1823, 209; of 1828, 209; 
of 1834, 209; of 1839, 209; of 1856, 
209; of 1860, 209; of 1933, liv, 211, 273 



constitution of 1979, 261, 305; armed 
forces under, 273-74, 294; Council of 
Ministers under, 212; death penalty 
under, 314; drafting committee for, 52; 
executive under, 212; individual rights 
under, 314; influences on, 212; legis- 
lature under, 212; police under, 294; 
president under, 212, 294; promul- 
gated, 212; regional governments 
under, 221; state of emergency under, 
212, 274, 314; suspended, xxxviii, 208 

construction: growth of, 193; housing, 48; 
irrigation, 48; as percentage of gross 
domestic product, 146; railroad, 33, 69; 
road, 33, 48, 69-70, 163, 242; of shanty- 
towns, 90 

consumer goods, 169; imports of, 168, 

169; in Lima, 88 
consumer price index (CPI), 196 
Control and Reduction of Coca Cultiva- 
tion in the Upper Huallaga Project, 
295-97 

Cooperation Popular. See Popular Coop- 
eration 

cooperatives, 74; agricultural output under, 
50, 148; decollectivized, 148, 184; 
under Velasco, 183, 184 

copper: export of, 142, 166; foreign in- 
vestment in, 144, 145, 151, 152; min- 
ing of, 4, 68, 143-44; number of 
workers in, 39 

Cornell-Peru project, 124-25 

Cornell University, 124 

Corongo Province: migration from, 83 

corporate communities: land holding, 78; 
and political organization, 122 

corporatism, 183 

corregidores de indios, 20-21, 82, 102; func- 
tions of, 20 

corregimientos . See districts 

corruption, 40, 52, 261; in American 
Popular Revolutionary Alliance, 245; 
in Belaunde government, 50; aggra- 
vated by coca industry, 170; by drug 
traffickers, 293; in Garcia government, 
245; injudicial system, 218; in police 
force, 245, 294; in public sector, 219; 
as result of economic crisis, 293 

Costa (coast) region, xxix, 63, 67; de- 
velopment of, 46; ethnic distribution in, 
81; haciendas in, 103-4; irrigation in, 
67; land area of, 67; migration to, 67; 
percentage of population in, 4, 84; 



396 



Index 



population density of, 67 ; precipitation 
in, 67; standard of living in, 109; tem- 
peratures in, 67; traditions of, 61; 
urban growth in, 67 
Costa Rica, 225 

cotton, 74; export earnings from, 142; ex- 
port of, 43, 142, 167; number of work- 
ers in, 39 

Council of Ministers, xxxix; appoint- 
ments to, 213; censure of, 216; under 
constitution of 1979, 212; distrust of, 
xli; members of, 213-14 

Council of the Indies, 20 

counterinsurgency, xxix, xlv-xlvi, liii, 54, 
231, 232, 242, 251; assistance, xxxix 

counternarcotics assistance, 293 

Counterterrorism Division (Direccion 
Nacional Contra el Terrorismo — 
Dincote), xliii, xlv, 301, 309 

coup plotters, xlviii-xlviv 

coups d'etat: of 1968, 4-5, 230; of 1895, 37; 
of 1919, 40; of 1929, 40; of 1962, 47-48; 
of 1968, 49, 152, 270; threat of, xlvi 

coups d'etat, attempted: of 1939, 303; of 
1992, xlviii 

courts, civilian: limitations on, 315 

courts martial: civilian trials in, 314; mili- 
tary trials in, 218, 314-15 

Courts of First Instance, 217 

Cox Beuzevilla, Edmundo, xlv 

CPI. See consumer price index 

CPT. See Peruvian Telephone Company 

credit: external, 172; tightened, 197, 198 

Credit Lyonnais, lv 

crime, 311-13; increase in, 207, 263, 264, 
294, 311-12, 315 

Criollos, xxix, xxxi, 51, 80 

crop substitution, xxxix 

CTP. See Confederation of Peruvian 
Workers 

CTRP. See Federation of Workers of the 
Peruvian Revolution 

Cuajone copper mine, 152 

Cuanto, S.A., 170, 180 

Cuba: military advisers from, 276; rela- 
tions with, 256 

curacas, 26 

currency: depreciation of, 142-43; 
devaluation of, 49, 190, 191; overvalu- 
ation of, li, 140, 151, 168, 172, 173, 
190; stability of, 143 

current accounts: deficit, 172, 173, 191, 
194; as percentage of gross domestic 



product, 172; surplus, 173, 191, 194, 196 
Cusco, xxx, 8, 82; decline in prestige of, 
25; migration to, xxxv, 87; as "navel" 
of Inca Empire, 92; religious festivals in, 
118; Spanish invasion of, 14; textile 
manufacturing in, 23; tourism in, 165 
Cuzco. See Cusco 



Datum polls, xl, lvi 

Day of the Indian, 125 

death: causes of, 133; penalty, 314 

death squads, 245 

Debate magazine, xliv, xlvi 

debt: long-term, 173; retirement of, 32; 
short-term, 173; as percentage of gross 
domestic product, 173; from War of the 
Pacific, 268 

debt, external, 139, 172-74; under 
Belaunde, 140; increase in, 188; as per- 
centage of gross domestic product, 172 

debt, foreign, 272; under Belaunde, 253; 
build-up of, 40; dependence on, 33; 
under Garcia, 57, 253; moratorium on, 
43 

debt rescheduling, 293 

debt service, 140-41; under Fujimori, 1, 
174; Garcia' s refusal to pay, 141, 193, 
253-54; inability to pay, 140, 173; pay- 
ments of, 174; as percentage of exports, 
174; as percentage of gross domestic 
product, 174 

decentralization, xliii 

decollectivization, 148 

Decree Law 171, 216, 232, 241, 251, 274 

Decree 746, 279 

defense spending, 273, 289-92; attempts 
to curb, 254; as percentage of gross 
domestic product, 292 

deforestation, 72 

Degregori, Carlos Ivan, xxxvii, xivi, lii 
Deitz, Henry, 90 

de la Puente Raygada Albela, Oscar, 
xxxix 

de la Puente Uceda, Luis, 304 
democracy: armed forces as protector of, 
272-73; reform of, xli; transition to, xli, 
li, 5, 207, 241-43; unrepresentative na- 
ture of, xl 
Democratic Constituent Congress (Con- 
greso Constituyente Democratico — 
CCD), xlii; elections for, xlix, liv, 209; 
role of, 313 



397 



Peru: A Country Study 



Democratic Front (Frente Democratico — 
Fredemo), 221, 226-27; in campaign 
of 1990, xxxi, 226-27, 245, 247; dis- 
satisfaction with, 247 

Democratic Party, 269 

democratization of the system of govern- 
ment (1991), 213 

departments: population distribution in, 
92 

dependency analysis, 187 

dependency ratios, 116 

depopulation, xxxvi, 17, 22, 80 

depression of 1873, 34 

de San Martm, Jose, 3, 28, 261; role of, 
in independence, 266-67 

desborde popular (overflowing of the masses): 
effect of, on government services, 4 

de Soto, Hernando, 112, 156, 213, 226; 
as adviser to Fujimori, xxxiii 

de Toledo y Figueroa, Francisco, 18-19; 
settlement patterns under, 81 

development programs: under Belaunde, 
191; effects of insurgency on, 293; en- 
vironmental effects of, 72; foreign as- 
sistance for, 308; government role in, 
50; land-reform, 124-25; under Odria, 
124; under Velasco, 51 

diet {see also food), 134; in the Sierra, 54 

Dincote. See Counterterrorism Division 

Direction Nacional Contra el Terrorismo. 
See Counterterrorism Division 

disappearances, xxxviii, 245, 313 

disease, 133; depopulation by, 80; impact 
of, 64, 96; introduction of, by Euro- 
peans, 17, 64 

district council {consejo distrital), 220 

districts (corregimientos), 20 

Dobyns, Henry F., 17 

domestic demand, 197 

domestic servants, 113 

Doughty, Paul L., xxix, xxxvii, 17 

drug traffickers: charges against, dropped, 
218; corruption by, 293; threats by, 217 

drug trafficking, xxxviii, xxxix, 127, 310- 
11; arrests for, 312; under Belaunde, 55; 
by Colombians, 56; effect of, on native 
Americans, 96; increase in, 1, 263, 264, 
294, 312; influx of dollars from, 198; 
military interdiction of, 288; military 
training to fight, 276; police interdic- 
tion of, 298, 299, 301; sentences for, 
313; Shining Path involvement in, 306; 
and United States relations, 254, 255 



dualism, xxix 

Durand Araujo, Teresa ("Doris," 
"Juana"), xlv 

earthquakes, 73-74, 87 

earthquake saints, 74 

ECLAC. See Economic Commission for 
Latin America and the Caribbean 

economic: associations, 234-36; auster- 
ity program, 52, 252; recovery, condi- 
tions for, 200-201 

Economic Commission for Latin Amer- 
ica and the Caribbean (ECLAC), 
xxxiv, 180 

economic crisis of 1980s, 5, 246, 273; ef- 
fect of, on armed forces, 262, 289-92, 
293; effect of, on insurgency, 293; fear 
of violence in reaction to, 199; and for- 
eign relations, 254, 255; and informal 
sector, 156; labor unions under, 237; 
migration to escape, 255; symptoms of, 
140 

economic growth: foreign trade as factor 
in, 165; from guano, 32; during 
Korean War, 46; rate of, 139 

economy: during Great Depression, 43, 
141; effect of Korean War on, 46; ef- 
fect of, on agricultural sector, 149; ef- 
fect of, on manufacturing sector, 150; 
effect of, on mining sector, 152; export- 
oriented, 242; factors in deterioration of, 
140; implications of coca for, 170-72; in- 
fluence of mercantilism on, 21; influence 
of World War I on, 38; intelligence ser- 
vices and, 279; problems with, 4; reac- 
tion of, to informal economy, 157; role 
of government in, 45; under oncenio, 40; 
under Spanish rule, 22 

economy, closed (see also protectionism), 
139; conflict of, with free-trade econ- 
omy, 139-40 

economy, free-trade, 139, 141; conflict of, 
with closed economy, 139-40 

economy, informal. See informal sector 

economy, mixed, 51 

economy, open: under Belaunde, 191; 
under Fujimori, liv, 200; per capita in- 
come under, 183 

Ecuador: border conflict with, 44, 55, 
263, 267, 302; cholera in, 256; contra- 
band trade with, 255; relations with, 
254, 263; war with, 33, 302 



398 



Index 



education {see also schools): access to, 181, 
202; government spending on, xxxiv, 
107; importance of, 111, 128, 239; in- 
vestment in, 48-49; language in, 128; 
and national identity, 131; postsecon- 
dary, 130; public, xxxiv; quality of, 
239; and social advancement, 128; 
value placed on, 127-28, 129, 130; of 
women, 129 

EGN. See Naval War College 

Ejercito de Liberacion Nacional. See Na- 
tional Liberation Army 

Ejercito Peruano. See Peruvian Army 

El Comercio, 44, 130, 240 

El Diario de Marka, 240 

elections: municipal, 220, 308; national, 
222, 308; of 1931, 41, 269; of 1936, 43; 
of 1956, 47; of 1963, 48; of 1980, 52, 
227, 305; of 1985, xl, 56, 243; of 1989, 
220, 308; of 1992, xlix, 208; of 1993, 
li-lii, liv, 209; regional, 221; sabotaged, 
222 

election campaign of 1990, xxxi-xxxii, 
245-48 

election of 1990, xl, 208, 245-48, 308; 
first round, xxxi-xxxii, 246; left in, 
228; mudslinging in, 246, 247; second 
round, xxxii, xxxiii, 246-47; voter 
turnout for, 222 

electoral system, 222 

electric power: consumption of, 88; price 
of, 194; shortages of, 245 

eleven-year rule. See oncenio 

El Fronton Prison, 317; massacre in, 264, 
301, 316; riots in, 264, 316 

elite class, 62, 104-6; and armed forces, 
269-70; attitudes of, toward lower 
classes, 112; basis of power of, 105; in 
campaign of 1990, xxxi; control of 
resources by, 74; economic power of, 
4, 105, 106; effect of 1968 coup on, 4; 
impact of land reform on, 105-6, 184; 
liberal, 269; in Lima, 109; names of, 
105; new, origins of, 82-83; presump- 
tion of status by, 104; provincial, 109; 
of Quechua origins, 105; racial compo- 
sition of, 105, 106; rise of new, 37; 
ruined by War of the Pacific, 268; size 
of, 106; social structure of, 105 

El Misti, 73 

ELN. See National Liberation Army 
El Nino, 72; cycles of, 72-73; effects of, 
72-73, 149 



El otro sendero (The Other Path) (de Soto), 

xxxiii, 112, 156 
El Peruano, 240 

emergency military zones, xxxv 

employment, 175-76; disincentives for, 
236; increase in, 194; in informal econ- 
omy, 156; in manufacturing, 142, 151; 
rate, li; of students, 240 

Empresa Minera del Peru. See Peruvian 
State Mining Enterprise 

Empresa de Transporte Aereo del Peru. 
See Air Transport Company of Peru 

Empresa Nacional de Ferrocarriles. See 
National Railway Enterprise 

Empresa Nacional de Puertos. See Na- 
tional Ports Enterprise 

Empresa Nacional de Telecomunica- 
ciones del Peru. See National Telecom- 
munications Enterprise of Peru 

Empresa Publica de la Industria Aero- 
nautica. See Aeronautics Industry Pub- 
lic Enterprise 

Empresas de Propiedad Social. See Social 
Property Enterprises 

Enafer. See National Railway Enterprise 

Enapu. See National Ports Enterprise 

encomenderos, 82, 102; functions of, 20 

encomienda system, 16; end of, 16; land dis- 
tribution under, 102; serfs under, 81, 
102 

Entelperu. See National Telecommunica- 
tions Enterprise of Peru 
Enterprise for the Americas Initiative, 256 
environment: deterioration of, 135; effects 
of coca production on, 71, 170; effects 
of development programs on, 72; sen- 
tences for damaging, 313; water pollu- 
tion, 83-84; of Sierra, 76 
EP. See Peruvian Army 
EPN. See National Police School 
EPS. See Social Property Enterprises 
Escuela de Guerra Naval. See Naval War 
College 

Escuela de Polici'a Nacional. See National 
Police School 

Escuela Militar. See Military Academy 

Escuela Naval del Peru. See Naval Acad- 
emy of Peru 

Escuela Superior de Guerra. See National 
War College 

Escuela Superior Tecnica del Ejercito. See 
Army Advanced Technical School 

ESG. See National War College 



399 



Peru: A Country Study 



ESTE. See Army Advanced Technical 
School 

ethnic: composition, 95; discrimination, 
80, 109; distribution, 81 

ethnic dualism, xxix, xxx; erosion of, 
xxix, 4; exacerbated by development, 
46; legacy of, 3; origins of, 3 

ethnic identity: change of, 62-63, 100; de- 
termination of, 95-96; language as in- 
dicator of, 95 

Europe: aid from, 51; cocaine consump- 
tion in, 55; immigrants from, 80; mili- 
tary relations with, 256; Shining Path 
networks in, xliv 

Europeans: in elite class, 106; immigrants 
from, 99; as percentage of population, 
24, 95 

Evangelical Movement (see also Protestant 
Church; Summer Institute of Linguis- 
tics; see also under individual sects), 233 

exchange rate: correction of, 190, 191, 
193; decline of, 194; effect of remov- 
ing controls on, 198; effect of, on trade, 
168; increase in, 197; multiple, 244; 
overvaluation of, 201-2; real, 168, 194; 
unified, 197 

executive branch (see also president), 
212-14; under constitution of 1979, 212 

exile, 88 

export capitalism, 37-38 

export earnings, 142 

exports (see also foreign trade; see also under 
individual products), 166-70; of agricul- 
tural products, 147, 167; of cotton, 37, 
43, 142; debt-service payments as per- 
centage of, 174; decline in, 194; de- 
velopment of, 143; discouraged, 191; 
effect of exchange rate on, 168; effect 
of inflation on, 143; expansion of, 31, 
35; offish meal, 72, 149, 150; offish 
products, 72, 149; by foreign firms, 
145; of guano, 31, 142; incentives for, 
143; of manufacturing outputs, 151, 
167, 190-91, 200; of metals, 43, 142, 
151, 166; of minerals, 37; of nitrates, 
31; of nontraditional products, 166; ob- 
stacles to, 168; as percentage of gross 
domestic product, 166; of petroleum, 
155, 166; of primary products, 139, 
141, 142-44; of rubber, 142; of sugar, 
37, 142; of traditional products, 166; 
value of, 32, 166; volatility of, 166; of 
wool, 31 



Expreso, xlv, 240 

family, 110-12; abandoned by men, 110, 
112; average size of, 110; bilateral, 111; 
clashes in, 117; desired size of, 86; ef- 
fect of urban migration on, 110; heads 
of, 110, 112; Hispanic, 111; kinship 
traditions in, 116-17; parents in, 111; 
patrilinear, 110; in poverty, 180; 
Quechua, 110; rural, 110, 114-16; self- 
sufficiency in, 115; tasks in, 114-15; 
technology in, 115-16; unity of, 110, 
117; urban, 110 

family planning, 85-86; women's atti- 
tudes toward, 86 

FAO. See Food and Agriculture Organi- 
zation of the United Nations 

FAP. See Peruvian Air Force 

farmers, 78 

farming: in the Sierra, 78; subsidies of, 
xxxiii; subsistence, 20 

farms: division of, 76; locations of, 76; 
sizes of, 76 

Faucett Aviation Company (Compama de 
Aviacion Faucett), 164 

Federation Nacional de Trabajadores 
Mineros y Metalurgicos Sindicalistas 
del Peru. See National Federation of 
Syndicated Mining and Metallurgical 
Workers of Peru 

Federation of Workers of the Peruvian 
Revolution (Central de Trabajadores 
de la Revolution Peruana — CTRP), 
179, 237 

Federico Villareal, 132 

Ferdinand VII, 28 

FF.AA. See armed forces 

FF.PP. See Peruvian Police Forces 

fiestas: for rites of passage, 113 

fishing, 67, 149-50; annual catch, 149, 
150; excessive, 143, 149; foreign invest- 
ment in, 50; as percentage of gross 
domestic product, 145-46; in the Selva, 
78 

fishing industry, 72; diversification of, 
150; growth of, 88; monopolies in, 150; 
nationalization of, 149-50; repriva- 
tized, 150 

fish meal: boom, 149; exports of, 72, 143, 
150, 167; production of, 48, 72; use of, 
74 

fish products: exports of, 72, 149 



400 



Index 



FNTMMSP. See National Federation of 
Syndicated Mining and Metallurgical 
Workers of Peru 

food (see also diet), 202; assistance, 112, 
134, 199, 233, 234; import of, 144; out- 
put of, 147; prices, 47; subsidies, xxxiii, 
47, 52, 148 

Food for Peace. See United States Food 
for Peace 

foreign assistance, 248; suspended, xxxix, 
293; from United States, 232, 254, 276, 
293; withdrawal of, 125 

foreign borrowing: by Belaunde, 52; by 
Velasco, 52, 190 

foreign companies, 145; exports by, 145; 
nationalization of, 183, 186, 187; 
natural resources exploited by, 3-4; 
public distrust of, 145; restrictions on, 
186; roles of, 3-4 

foreign debt. See debt, foreign 

foreign exchange, 194, 195; abundance 
of, 201 ; earnings from coca, 170; earn- 
ings from guano, 142; earnings from 
mining, 151; price of, 202 

foreign influence, 252-53; attempts to 
reduce, 187, 252 

foreign investment, 141; amounts of, 35; 
attempts to restrict, 145; in banking, 
50; under Belaunde, 50; by Britain, 35; 
in copper, 151, 152; effect of Great 
Depression on, 144-45; evolution of, 
144-45; in fishing, 50; under Fujimori, 
1, 145; and government, 144; during 
Korean War, 46; in manufacturing, 50; 
in mining, 50, 151, 152; in the 
nineteenth century, 144; in petroleum, 
151, 155; restrictions on, 183, 186; by 
United States, 35; under Velasco, 145, 
183, 186 

foreign relations, 252-57; under Fuji- 
mori, 255-57; under Garcia, 253-55; 
strains on, 254 

forests (see also Selva), 71 

France: development assistance from, 
308; materiel from, 256, 278, 286; mili- 
tary mission of, 269, 275, 283; military 
training by, 269, 275 

Fredemo. See Democratic Front 

Frente Democratico. See Democratic 
Front 

Fuerza Aerea del Peru. See Peruvian Air 
Force 

Fuerzas Armadas. See armed forces 



Fuerzas Policiales. See Peruvian Police 
Forces 

Fujimori, Alberto K., 229; autogolpe by, 
255, 261; background of, xxx-xxxi, 
228, 245-46; birthdate, xxxiii; cam- 
paign of, xxxi-xxxii; campaign 
promises of, xxxii-xxxiii, 246; foreign 
visits of, 248; inauguration of, xxxiii; 
popularity of, xxxiii, xxxiv, xl, xliii, lii, 
lvi, 249; rise to power by, xxx, 225; 
support base of, xxxii, 245 

Fujimori administration (1990- ), lv; ad- 
visers in, 247; alliance of, with Ameri- 
can Popular Revolutionary Alliance, 
250-51; armed forces under, xlvii, 232; 
cabinet of, 250; Congress dissolved by, 
208; constitution suspended by, 208; 
coup attempt against, xlviii-xlviv; debt 
service under, 1, 174; decentralization 
under, xliii; decrees of, lv; democrati- 
zation under, 213; economy under, liv, 
196; foreign investment under, 1, 145; 
foreign relations under, 255-57; goals 
of, 196, 247; infrastructure under, 163; 
liberalization of banks under, 160; 
judiciary dissolved by, 208; National 
Intelligence Service under, 279; oppo- 
sition to, 251; poverty under, xxxiv; 
privatization under, 1, liv, 134, 164-65, 
248; prospects for, 249-52; reform by, 
xli, xlii, liii-liv; reorganization of po- 
litical divisions under, 95; scandal in, 
251; social emergency programs 
promised by, 199; stabilization pro- 
gram of, 141; trade policies of, 169; 
transition to democracy under, xli-xlii; 
unemployment under, xxxiv 

Fujishock, 228, 252; effects of, xxxiv, liv, 
141, 248-49; popular reaction to, 
xxxiii, 208, 248-49; problems with, 
141; social emergency programs under, 
234, 250 

Gallinazo people, 6 
Gamarra, Augustm, 30 
gamonales, 4, 47 

Garcia Perez, Alan: campaign of, 243; ex- 
tradition of, liii; seclusion of, 244 

Garcia administration (1985-90), xl, 
56-57, 213, 243-45; agriculture under, 
181-82, 192; armed forces under, 231, 
264; attempt by, to nationalize banks, 



401 



Peru: A Country Study 



xxxi, 157-60, 188, 195, 216, 234, 243- 
44; borrowing by, 195; concertacion pro- 
gram under, 192, 234, 237, 243; cor- 
ruption in, xxx; debt service under, 141, 
253-54; economy under, 192, 244; for- 
eign relations under, 253-55; manu- 
facturing under, 150; nationalization 
under, 188; poverty under, 180-81, 192; 
railroads under, 160; reform under, 140; 
reorganization decree of, 92-93, 95 

Garcia y Garcia, Carlos, 228 

gas, natural: reserves, 71; in Selva, 71 

gasoline, 194; price of, 196 

Gasca, Pedro de la, 16 

GC. See Civil Guard 

GCTP. See General Confederation of 
Peruvian Workers 

GDP. See gross domestic product 

General Confederation of Peruvian 
Workers (Confederation General de 
Trabaj adores del Peru— CGTP), 177, 
236 

General Police (Policia General — PG), 
294, 295-300; chains of command in, 
295; commands of, 295; number of 
members of, 295; organization of, 295; 
training of, 295, 297 

Germany: materiel from, 278; reaction of, 
to autogolpe, 255 

Gilbert, Dennis, 41 

Gini index, 182-83 

God of the Sun, 8, 9 

godparenthood (padrinazgo), 113-14 

gold: export of, 142 

gold rush, 71 ; effect of, on native Ameri- 
cans, 96 

gold standards, 143 

Gonzalez, Raul, xxxvii, lv 

Gootenberg, Paul E., 30, 33 

Gorriti Ellenbogen, Gustavo, xliv 

GNP. See gross national product 

government (see also under individual ad- 
ministrations), 208-22; corruption in, 
xxx, 245; decentralization of, 89; and 
foreign investment, 144; incompetence 
in, xxx; investment, 191; labor union 
created by, 179; local government de- 
pendence on, 220; municipal, 220; as 
percentage of gross domestic product, 
146; regional, xliii, 221; relations of, 
with labor, 46; reliance of, on armed 
forces, 251; role of, in development, 50; 
role of, in economy, 45; tensions of, 



with armed forces, 231 
Government Junta (Junta de Gobierno), 
304 

Government of National Emergency and 
Reconstruction, xxxix 

government services: decline in, 261; ef- 
fect of desborde popular on, 4; effect of 
urbanization on, 4 

government spending, 140; on education, 
xxxiv, 107; on health care, xxxiv, 107; 
on military, 107; restraints on, 173; on 
Supreme Court, 217 

GR. See Republican Guard 

Grace contract, 35 

Graham, Carol, xxxiii, xxxviii, xlvii, 112 
Grana Garland, Francisco: assassinated, 
45 

Grau, Miguel, 131, 268 

Great Depression, 40; economy during, 

43, 141, 143; impact of, 43-44 
gross domestic product (GDP): decline in, 
li, 195; increase in, 193; uncertainty 
about, 146-47 
gross domestic product fractions: agricul- 
ture, 145-46; budget deficit, 188, 193, 
195, 196; cocaine industry, 146, 170; 
construction, 146; current account, 172; 
debt-service payments, 174; defense 
spending, 292; external debt, 172; fish- 
ing, 145-46; government debt as per- 
centage of, 173; government services, 
146; manufacturing, 46, 146, 151; ser- 
vice sector, 155; state enterprises, 188 
gross national product (GNP): budget 
deficit as percentage of, 190; decline in, 
197, 261; growth of, liii; informal sec- 
tor as percentage of, 113 ; tax base as 
percentage of, 219 
Group of Eight, 256 
Grupo de Apoyo. See Support Group 
Grupos Campesinos. See Peasant Groups 
Guaman Poma de Ayala, Felipe, 13 
guano, 267; boom, 31, 142; era, 31-34; 
export earnings from, 142; export of, 
31, 142; extraction of, 3; foreign- 
exchange earnings from, 142; income 
from, 268; nationalized, 32; source of, 
31; use of, 74 
Guardia Civil. See Civil Guard 
Guardia Nacional. See National Guard 
Guardia Republicana. See Republican 
Guard 

Gutierrez, Gustavo, 118, 233 



402 



Index 



Guzman Reynoso, Abimael, 54, 239, 
241, 305; captured, xliii, 264, 274, 309, 
315; convicted, 274, 315; opinion of, 
xxxviii; philosophy of, 307 

hacendados, 20 

haciendas {see also landlords), 19-20, 78; 
administration of, 102-3; expansion of, 
22, 23, 102; gamonalismo on, 124; serfs 
on, 81, 102, 103-4; sizes of, 78 
Hacienda Vicos: land reform at, 124 
Haya de la Torre, Victor Raul, 39, 41, 
212, 230; asylum in Colombian em- 
bassy, 45-46; in election of 1956, 48; 
exile of, 46; political party founded by, 
177; political program of, 44; death of, 
52 

Hazelton, Sandra Woy, 242 

HDI. See Human Development Index 

health care: access to, 96; facilities, 133; 

government spending on, xxxiv, 107, 

202 

Heifer Palacios, Gloria, 250, 251 
Hemming, John, 8 
Hermoza Rfos, Nicolas, xlvii 
Hierroperu, S.A., 1 
highlands. See Sierra 
housing: construction projects, 48; infor- 
mal, 4 
Hoy, 240 

Huallaga River, 63, 70 
Huancavelica: mercury at, 18 
Huancayo, 82 

Huancayo-Huancavelica Railroad, 160 
Huanuco Department: native Americans 
in, 99 

Huanuco region: agriculture in, 78; farm- 
ers in, 78 
Huari people. See Wari people 
Huascar, 12; rivalry of, with Atahualpa, 
17 

Huascar, 268 

Huatay Ruiz, Marta ("Tota"), xlv 

Huaylas: agriculture in, 77 

Huaylas Province: migration from, 83 

Huayna Capac, 12, 17 

Human Development Index, xxxiv 

human rights violations, 1, 252; in counter- 
insurgency, 54, 272, 293, 294, 308; in 
insurgency, 207, 218; sentences for, 
313; by soldiers, 314-15 

Humboldt, Alexander von, 18 



Humboldt Current, 72, 149 

Hurtado Miller, Juan Carlos, xxxiv, 214; 

as minister of economy, xxxiii, 248; 

popularity of, 249; as prime minister, 

248; resignation of, 250 

lea, 82; religious festivals in, 118; wine 
production in, 23 

IDL. See Legal Defense Institute 

IMAP. See Marine Infantry of Peru 

Imasen Company, lii 

IMET. See International Military Educa- 
tion and Training 

IMF. See International Monetary Fund 

imports {see also foreign trade): of con- 
sumer goods, 168, 196; effect of ex- 
change rate on, 168; of manufacturing 
equipment, 168-69; of manufacturing 
inputs, 168, 186; as percentage of gross 
domestic product, 166; restrictions on, 
143, 191; value of, 166; volatility of, 
166 

import-substitution industrialization, 143 
Inca (emperor), 9 

Inca Empire: agricultural production in, 
9; civil war in, 12; conscription in, 265; 
cultures in, 79, 91; Cusco as "navel" 
of, 92; divisions of, 92; expansion of, 
10, 265; extent of, 12; indirect rule by, 
9; infrastructure under, 265; land dis- 
tribution in, 8-9; mita system under, 9, 
265; mitmaq system under, 10; modern 
view of, 11-12; population of, 17; 
quarters of, 92 ; redistribution of wealth 
under, 9-10; repression under, 79; 
resistance to, 10; self-sufficiency in, 8; 
settlement patterns in, 81; social or- 
ganization under, 9; social relations in, 
9; technology in, 10; tribute to, 9 

Inca Highway, 163 

Incas, 6, 8-12; expansion of, 8 

income: from coca production, 170; na- 
tional, 140; under open economy, 183; 
per capita, li, 207; rural, 193 

income distribution {see also inequality; 
land distribution; poverty), 46, 181-83 

income redistribution, 51 

Indaer-Peru. See Aeronautics Industry 
Public Enterprise 

independence, 27-29; aversion to, 28; 
movements in Latin America, 266; 
proclaimed, 29, 261 



403 



Peru: A Country Study 



Indians (see native Americans) 
Indigenous Community (Comunidad In- 

dfgena), 102; established, 124 
indigenismo (indigenism), 39, 41 
indigenista (indigenous) movement, 39 
indios {see also native Americans), 80; con- 
notation of, 100 
industrial: capacity, 200-201; communi- 
ties, 184-85; products, 142 
Industrial Community Law (1970), 186, 
230 

industrialization: drive to promote, 185 

Industrial Reform Law, 236 

industry, 184-85; distribution of, 88; em- 
phasis on, 144; exports, 200; fiscal 
benefits for, 186 

inefficiency, in public sector, 219 

inequality, 139, 140, 203; causes of, 181; 
degree of, 181, 182; increase in, 179- 
80; measures of, 182-83; under open 
economy, 183 

Infanteria de Marina del Peru. See Ma- 
rine Infantry of Peru 

infant mortality, 134; in the Sierra, 54 

inflation, xxxiv, 39, 52, 139, 140, 188, 
191-92; attempts to avoid, 178-79; at- 
tempts to reduce, 52, 192-93, 249; 
under Belaunde, 191, 242; decrease in, 
xxxiv, 1, 193; effects of, 143; effect of, 
on armed forces, 289-92; under Fuji- 
mori, xxxiv, liii, liv, 141, 196, 249; 
under Garcia, 193, 244; impact of, on 
working class, 39; increase in, 194, 196, 
242; during oil embargo, 51; in 1990, 
197; in 1991, 197; rate of, 261; under 
Velasco, 186 

informal sector (of economy), xxix, xxxiii, 
146, 156, 207; attitudes toward, 112; 
as cultural phenomenon, 157; domes- 
tic servants in, 113; employment in, 4, 
112, 156; government response to, 157, 
192; increase in, xxxiv, 4, 52, 156; 
number of workers in, 176; political 
support of, 228; reaction of formal sec- 
tor to, 157; resources for, 192; urban, 
112-13, 156; and urban migration, 
156-57; women in, 112 

infrastructure: Incan, 265; terrorist at- 
tacks on, 308 

inland waterways, 164 

Inpe. See National Institute of Prisons 

Inquisition, 22 

Instituto Peruano de Seguridad Social. See 



Peruvian Institute of Social Security 

Instituto de Defensa Legal. See Legal 
Defense Institute 

Instituto Nacional Penitenciario. See Na- 
tional Institute of Prisons 

insurgency {see also Shining Path; Tupac 
Amaru Revolutionary Movement), 
261, 264, 272, 303-10, 315; civilians 
killed in, xlv, 126, 312-13; effect of eco- 
nomic crisis on, 293; under Garcia, 57; 
impact of, on government, 216; in- 
crease in, 207, 263, 294; in 1960s, 130, 
304; number of attacks in, 312; by 
peasants, 304; police killed in, xlv, 264, 
297; police stations targeted by, 297; 
in rural areas, 270, 312; soldiers killed 
in, xlv, 264, 293 

insurgents, 217; assassinations by, 312; 
casualties among, xlv; charges against, 
dropped, 218; threats by, 217, 218, 312 

intendancies {intendencias), 92 

Intelsat. See International Telecommuni- 
cations Satellite Corporation 

International Monetary Fund (IMF), 1, 
174, 190, 208; loan from, 256; reaction 
of, to autogolpe, 255; threat to expel, 254 

International Petroleum Company (IPC), 
49, 50, 144, 236; contract with, 211; 
domination by, 144; nationalization of, 
145, 152, 186, 187, 270 

International Telecommunications Satel- 
lite Corporation (Intelsat), 164 

International Telephone and Telegraph 
Company (ITT), 187 

Investigative Police of Peru (Policia de In- 
vestigaciones del Peru — PIP), 294 

investment: foreign. See foreign invest- 
ment; in Lima, 88; private, 193, 195 

Iparraguirre Revoredo, Elena Albertina 
("Miriam"), xliv 

IPC. See International Petroleum Com- 
pany 

IPSS. See Peruvian Institute of Social 
Security 

Iquitos, 82; migration to, 87; port of, 63 
iron: mining of, 68 

irrigation: construction projects, 48; in 
Costa region, 67; development of, by 
pre-Inca cultures, 6, 7, 64, 74; in Sierra 
region, 76 
Italy: materiel from, 286, 287 
ITT. See International Telephone and 
Telegraph Company 



404 



Index 



IU. See United Left 

Izquierda Unida. See United Left 

Jacobsen, Nils P., 27, 35 

Japan, xli; aid from, 51; development as- 
sistance from, 308; Fujimori's visit to, 
248; relations with, xlix-1, 256-57 

Japanese: in elite class, 106; immigrants, 
80, 99-100; as percentage of popula- 
tion, 95; racism against, xxxii, 109; sta- 
tus of, 100 

Jenny Rodriguez, Maria ("Rita"), xlv 

John Paul II (pope), 233 

Joint Command of the Armed Forces 
(Comando Conjunto de la Fuerzas 
Armadas — CCFA); organization of, 
278; role of, 278, 281 

Jorge Chavez International Airport, 94, 
164, 288 

journalists, 1 

judges: appointment of, xlii-xliii; assas- 
sinated, 312; corruption of, xli; threat- 
ened, 217, 312 

judiciary, 217-19; backlog in, xlii, 218, 
312, 315, 317; courts in, 217; dissolved 
by Fujimori, 208; distrust of, xli; 
government funding of, 311; indepen- 
dence of, 217; public attorneys, 217; 
public prosecutor's office, 217; reforms 
of, xlii; reorganized, 312; strike in, 315; 
suspended, xl, 312; vacancies in, 312 

Juliaca, 82; migration to, 87 

Jungle Border Highway, 87; construction 
of, 48, 242; length of, 163 

jungle. See Selva region 

Junta de Gobierno. See Government Junta 

justices of the peace, 217 

Kapsoli Escudero, Wilfredo, 124 

Kemmerer, Edwin, 43 

Kennedy, John F., 48 

Klaren, Peter F., xxix 

Korea, North: materiel from, 256 

Korean War: effect of, on economy, 46 

labor force: in agriculture, 175, 176; in 
informal economy, 156; in manufactur- 
ing, 175; in mining, 175; percentage of, 
in unions, 238; in service sector, 175 

labor movement, 41; assassination of 



leaders of, 238; government crackdown 
on, 40; prospects for, 238 

labor unions {see also unionization; see also 
under individual unions), 177-79, 184- 85, 
236-38; government relations with, 46; 
members of, 237; number of, 178; per- 
centage of work force in, 238; social 
protest by, 179; strikes by, 177, 179; 
under Velasco administration, 178-79, 
185; wages for members of, 182; weak- 
ness of, 177, 236 

La Brea y Parinas oil fields, 49 

La Cantuta, 133 

Lake Titicaca, 8, 63, 164, 165 

Lake Titicaca Patrol Force, 285 

land: arable, 74, 142; area, 63, 67; con- 
trol of, by elite class, 74; holdings, 78; 
illegal purchases of, 27; Spanish patri- 
mony over, 25-27 

Landazuri Ricketts, Juan (archbishop), 
233 

land distribution, 46-47, 78, 142; in- 
equality of, 181 ; under land reform, 74; 
under Legufa, 124; under Morales Ber- 
mudez, 190; restrictions on, 77 

landlords {see also haciendas), 123-25; 
Catholic Church as, 118; private mili- 
tias of, 266 

land reform {see also Agrarian Reform 
Law; land distribution), 4, 184; agricul- 
tural production under, 184; under 
Belaunde, 48; changes in, 184; cooper- 
atives under, 50, 148, 184; effects of, 
148; elite under, 184; struggles for, 304; 
under Velasco, 50, 183 

landslides, 69, 87, 163 

land tenure, 19-20, 46; haciendas under, 
19-20; subsistence farming under, 20 

land use, 184 

language {see also under individual languages): 
of Chimu people, 10; of Inca empire, 
10; as indicator of ethnicity, 95 
La Prensa, 45 
La Republica, 1, 240 
latifundios, 46; abolished, 125 
Latin America: independence movements 

in, 266; poverty in, 180 
Latin America Monitor, xlvi 
Latin American Special Reports, xxxv 
Law of Political-Military Commands 

(1985), 274 
Law of the National Population Council 
(1985), 85 



405 



Peru: A Country Study 



lead: export of, 142; mining of, 68 

League of Nations, 43 

Leftist Socialist Accord (Acuerdo Socia- 
lista Izquierdista— ASI), 227, 228 

Legal Defense Institute (Instituto de De- 
fensa Legal — IDL), xlv 

legislature, 214-17; under constitution of 
1979, 212; elections to, 214-16; houses 
of, 214; powers of, 214, 216; require- 
ments for members of, 214; terms in, 
214 

Leguia y Salcedo, Augusto B., 39-40; 

death of, 40; as dictator, 144, 261, 269; 

overthrown, 40 
Leguia administration, first (1908-12), 

144, 211 

Leguia administration, second (1919-30), 
39-41, 144, 211, 269; Congress purged 
by, 40; economy under, 40; infrastruc- 
ture under, 69-70; mita system revived 
by, 70; native Americans under, 124 

Leticia War (1932-33), 302 

liberation theology, 118, 233 

Liberty Movement (Movimiento de Li- 
bertad), xxxi, 226, 239; protest against 
banking nationalization, 244 

life expectancy: in the Sierra, 54 

Lima: Afro-Peruvians in, 99; Andeaniza- 
tion of, xxix, xxx; cathedral, 117; cen- 
trality of, 88-89; church activities in, 
117; cultural character of, 61 ; decline in 
prestige of, 25; effect of War of the Pa- 
cific on, 88; elite class in, 109; faculty 
in, 132; founded, 18, 92; growth of, 18, 
82; invaded, 29, 268; mass-transit train, 
163; migration to, xxix, xxxv, 4; 
municipal districts of, 94; national holi- 
days in, 131; percent of Peruvian popu- 
lation in, 87; political structure of, 94; 
population of, xxix, 47, 141; as primate 
city, 88; Shining Path activities in, 251; 
size of, 88; students in, 88, 132; tourism 
in, 165; unemployment in, 176; univer- 
sities in, 132; violence in, xxxvii 

limenos: characteristics of, 61 

liquidity: business, cut, 197; restraints on, 
198 

literacy rate, 239 
Little Princess from Yungay, 100 
livestock, 23, 64; alpacas, 63, 68, 115, 
120; cattle, 64, 68, 77; llamas, 63, 68, 
115, 120; pigs, 64; poultry, 64; sheep, 
64, 68, 77 



living standards: deterioration of, xxxiv, 
207, 244; increase in, 194; by region, 
108-9; in Sierra, 46 

llamas, 63, 68, 115, 120 

Lobaton, Guillermo, 304 

Lobo, Susan, 90 

Lopez de Romana, Eduardo, 37 

Lord of the Miracles. See Senor de los 
Milagros 

Lord of the Tremors. See Senor de los 

Temblores 
Loreto Department: native Americans in, 

99 

Los Montoneros, 266 

lower class: poverty of, li; in rural areas, 
108; in urban areas, 108 

Lucero Cumpa Miranda, Maria, 218; cap- 
ture of, lv 

Lumbreras, Luis Guillermo, 12 

Lupaca people, 8 

Lurigancho Prison: massacre in, 264, 
316; population of, 317; riots in, 264, 
316 



Macchi Aviation Company (Aeronautica 

Macchi — Aermacchi), 287 
Machupicchu, 165 

Madre de Dios Department: native Amer- 
icans in, 99 

maize: introduction of, 6; production of, 9 

Malca Villanueva, Victor, 1, 299 

Malpica Silva Santiesteban, Carlos, 106 

Manco Capac II: kingdom of, 15; rebel- 
lion by, 14; as Spanish puppet, 14 

Mangin, William, 90 

Mantaro Valley, xxxvii 

Mantilla, Felix, 316 

manufacturing, 150-51; diversification in, 
23; downturn, 142, 195; effect of econ- 
omy on, 150; employment in, 142, 151; 
exports, 151, 167, 190-91; foreign in- 
vestment in, 50; under Garcia, 150; 
governing ownership in, 51; growth of, 
150, 151, 193; imports of machinery 
for, 168-69; labor force in, 175; obsta- 
cles to export of, 168; as percentage of 
gross domestic product, 46, 146, 151; 
textile, 23; wages in, 182 

manufacturing inputs: import of, 168, 
186; tariffs on, 169 

Mao Zedong, 305 

Maranon River, 63, 70 



406 



Index 



Maria Arguedas, Jose, 120 

Mariategui, Jose Carlos, 12, 39; contri- 
butions of, 41; Peruvian Socialist Party 
founded by, 40; Shining Path founded 
by, 54 

Mariateguist Unified Party (Partido 
Unificado Mariateguista— PUM), 227 

Marina de Guerra del Peru. See Peruvi- 
an Navy 

Marine Infantry of Peru (Infanteria de 
Marina del Peru — Imap), 285 

Maritime Industrial Services (Servicios 
Industrials de la Marina — Sima), 286 

maritime region, 72 

marginality, xxix, 156 

marriage, 76 

Martin of Porres (saint). See San Martin 
de Porres 

Maryknoll fathers, 118 

massacre: Cayara, 218; prison, 231-32, 
264, 294, 316; by Sinchi Battalion, 315 

materiel: air force, 263, 287; army, 263, 
284; from Britain, 278, 286; diversity 
of, 278, 284; domestic, 287; foreign, 
263; from France, 256, 278, 286; from 
Germany, 278; from Italy, 286, 287; 
navy, 285-86; from the Netherlands, 
286; from Soviet Union, 263, 276, 278, 
284, 287; from United States, 270, 276, 
278, 284, 286 

Matos Mar, Jose, xxix, 4, 90 

Mayer, Enrique, 70, 78 

mayor domos, 118-19 

McClintock, Cynthia, xxxv-xxxvi, xl, 
xlix, Hi 

McCormick, Gordon H., xxxv-xxxvi, lv 
media, 240-41; freedom of, liv, 240; po- 
litical role of, 240-41 
Meiggs, Henry, 33 

mercantilism (see also neomercantilism): 
influence of, on modern economy, 21; 
under Spanish rule, 21 

merchant marine, 163 

Merchant Marine Academy, 281; en- 
trance requirements for, 281-82 

Mercado Comun del Sur. See Southern 
Cone Common Market 

Mercosur. See Southern Cone Common 
Market 

mercury, 17-18 

mestizos, xxix-xxxi, 80, 109; in campaign 
of 1990, xxxi; ethnic discrimination by, 
80; geographic distribution of, 81; as 



percentage of population, 24; popula- 
tion growth of, 80 

mestizo towns (poblachos mestizos), 82 

metals: exports of, 43, 151, 152, 166; out- 
put of, 152 

MGP. See Peruvian Navy 

middle class: advancement to, 63; politi- 
cal affiliation of, 47; poverty of, li; in 
rural areas, 108; in urban areas, 108 

migrant organizations (see also regional 
clubs), 87, 89-90, 93; as mechanisms 
of empowerment, 90 

migrants: number of, 62; origins of, 89; 
political divisions created by, 93-94 

migration: group, 89; patterns, 87-91; 
rural, 194 

migration, foreign: to escape economic 
crisis, 199, 255; to United States, xxxv, 
62 

migration, urban, 4, 46, 47, 67, 82, 
87-88, 106, 113, 142; toChimbote, 83; 
of cholos, 89; conditions provoking, 
xxix, xxxv, 87, 176, 181; economic 
causes of, 156-57; effect of, on agricul- 
tural production, 84, 176; effect of, on 
families, 110, 117; and informal econ- 
omy, 156-57; to Lima, xxix, 82; by ser- 
ranos, 62 

Miguel Castro Prison, 316; population of, 
317 

military (see also armed forces): assistance, 
xxxix, 270, 276; enlisted personnel, 
286; officers, 281, 286; personnel and 
Decree Law 171, 232; reform, 49-52; 
regions, 283-84 

Military Academy (Escuela Militar), 267, 
281; entrance requirements for, 
281-82; founded, 269, 275; training in, 
279 

military advisers: from Cuba, 276; diver- 
sity of, 278; from Germany, 276; from 
Italy, 276; from Soviet Union, 276, 277 
military class, 106-8; benefits for, 107; 
government expenditures on, 107; im- 
portance of, 106-7; as percentage of 
population, 107; population of, 107; 
professionalization of, 107; social activi- 
ties of, 107-8 
military intelligence school, 279 
military specialization school, 279 
military training: extent of, 279; by 
France, 269; impact of, 277; by Soviet 
Union, 263; by United States, 263 



407 



Peru: A Country Study 



minerals: export of, 37; in Sierra, 68 
Mineroperu Comercial. See Peruvian 

State Mineral Marketing Company 
mines, 152 

minifundio system, 76-77, 78, 148 
mining, 17-18, 151-52; by colonizers, 18; 
effect of economy on, 152; effect of po- 
litical violence on, 152; effect of strikes 
on, 152; exports from, 151; foreign ex- 
change from, 151; foreign investment 
in, 50, 152; governing ownership in, 
51; labor force in, 175; output, 152; as 
percentage of gross domestic product, 
146, 151; in Sierra, 68; tax revenue 
from, 151 
Mining Code (1950), 145, 152 
ministers: of economy and finance, liii, 
214, 248; of foreign affairs, 214; prime, 
214, 248 
Ministry of Agriculture, 147, 297 
Ministry of Defense, 213-14, 278; created, 
213, 264; military administration of, 
232 

Ministry of Education: contracts of, with 
Summer Institute of Linguistics, 121; 
nationalism promoted by, 131; role of, 
129 

Ministry of Foreign Relations, xxxix, liii 
Ministry of Interior, 297, 312; military 
administration by, 232; police adminis- 
tration by, 294 
Ministry of Labor and Indian Affairs, 124 
Ministry of Transit and Communica- 
tions, 281 
minka, 116 

Minpeco. See Peruvian State Mineral Mar- 
keting Company 

MIR. See Movement of the Revolution- 
ary Left 

Miriam. See Iparraguirre Revoredo, Elena 

Albertina 
Miro Quesada, Antonio, 44 
miscegenation, xxx, 79 
missionaries, 121 

mita de minas (mine labor draft), 81 
mita system; under Inca Empire, 9, 265; 

under Legufa, 70; under Spanish rule, 

19, 26 
mitimaes, 79 
mitmaq system, 10 

MNR. See Nationalist Revolutionary 

Movement 
Mobilization Law (1980), 231 



Mochica people, 6-7; accomplishments 

of, 7; art of, 7; location of, 6 
Monge Medrano, Carlos, 70 
Montesinos Torres, Vladimiro, xlviii, liv, 

251; background of, xlvi; influence of, 

xlvi-xlvii 
Morales Bermudez, Remigio, 37 
Morales Bermudez administration (1890- 

94): economy under, 52; military under, 

269 

Morales Bermudez Cerrutti, Francisco, 
51, 272 

Morales Bermudez Cerrutti administration 
(1975-80), 51; economy under, 186, 
190; problems in, 272; reforms by, 272 

Mormons. See Church of Jesus Christ of 
Latter-day Saints 

Morner, Magnus, 32 

Morote Barrionuevo, Osman, 218, 309 

Morote, Ostap, xlv 

Moseley, Michael, 73, 91, 135 

MOTC. See Class Movement of Work- 
ers and Laborers 

mountains, 63 

Movement of the Revolutionary Left 
(Movimiento de la Izquierda Revolu- 
cionaria— MIR), 48, 304 

Movimiento de la Izquierda Revolu- 
cionaria. See Movement of the Revolu- 
tionary Left 

Movimiento de Libertad. See Liberty 
Movement 

Movimiento de Obreros y Trabajadores 
Clasistas. See Class Movement of Work- 
ers and Laborers 

Movimiento Nacionalista Revolucio- 
nario. See Nationalist Revolutionary 
Movement 

Movimiento Nueva Mayoria. See New 
Majority Movement 

Movimiento 19 de Abril. See 19th of April 
Movement 

Movimiento Revolucionario Tupac 
Amaru. See Tupac Amaru Revolution- 
ary Movement 

Moyano, Maria Elena, xxxviii 

Mozambique, 254 

MRTA. See Tupac Amaru Revolutionary 

Movement 
mulattos, 80 

municipal council (consejo municipal), 220 
municipalities: governments of, 220; 
threats to, 220 



408 



Index 



Municipality of Lima, 117 
Murra, John, 10 

names: foreign, 105; Quechua system of, 

110; Spanish system of, 105, 111 
National Agrarian Association (Sociedad 

Nacional Agraria — SNA), 106 
National Agrarian University (Univer- 

sidad Nacional Agraria — UNA), xxx, 

132, 228 

National Autonomous University of San 
Marcos (Universidad Nacional Auto- 
noma de San Marcos — UNAM), 131 

National Confederation of Private Busi- 
ness (Confederacion Nacional de In- 
stituciones Empresariales Privadas — 
Confiep), 234 

National Council of Magistrates, xxxviii, 
xliii 

National Defense Council (Consejo de 
Defensa Nacional— CDN), 278-79 

National Defense Course, 282 

National Defense Secretariat (Secretaria 
de Defensa Nacional), 279 

National Defense System (Sistema de 
Defensa Nacional — SDN): National In- 
telligence Service in, 279; organization 
of, 278-79; role of, 278-79 

National Elections Board, 217, 222 

National Engineering University (Univer- 
sidad Nacional de Ingeniena), 132 

National Federation of Syndicated Min- 
ing and Metallurgical Workers of Peru 
(Federation Nacional de Trabajadores 
Mineros y Metalurgicos Sindicalistas 
del Peru— FNTMMSP), 237, 238 

National Guard (Guardia Nacional), 282 

national holidays, 131 

National Human Rights Coordinating 
Group, xxxv 

national identity, 131 

National Industries Association (Sociedad 
Nacional de Industrias — SNI), 234 

National Institute of Prisons (Instituto 
Nacional Penitenciario — Inpe), 312 

National Intelligence Service (Servicio de 
Inteligencia Nacional — SIN), xlvi, 251, 
279 

nationalism, 252 

Nationalist Revolutionary Movement 
(Movimiento Nacionalista Revolucio- 
nario— MNR), 225 



nationalization (see also state enterprises), 
144, 186-88; of banking, xxxi, 157-60, 
188, 195, 216, 234, 243-44; under Be- 
launde, 270; of Belco Petroleum Cor- 
poration, 152, 188; of Cerro de Pasco, 
152, 186; end of, 188; of fishing indus- 
try, 149-50; of foreign companies, 183, 

186, 187; under Garcia, 188; goals of, 
187-88; of guano, 32; of International 
Petroleum Company, 145, 152, 186, 

187, 270; protests against, 244; under 
Velasco, 145, 152, 183, 186 

National Jungle Air Transport (Trans- 
portes Aereos Nacionales Selvaticos — 
TANS), 288 

National Liberation Army (Ejercito de 
Liberation Nacional — ELN), 304 

National Liberation Party (Partido Libe- 
racion Nacional— PLN), 225 

National Mining and Petroleum Com- 
pany (Sociedad Nacional de Mineria y 
Petroleo— SNMP), 238 

National Odriist Union (Union Nacional 
Odrii'sta— UNO), 48, 270 

National Palace, 117 

National Police (Policfa Nacional — PN) 
{see also Peruvian Police Forces), 264, 
294; distrust of, xli 

National Police School (Escuela de Policia 
Nacional— EPN), 297 

National Ports Enterprise (Empresa Na- 
cional de Puertos — Enapu), 163 

National Railway Enterprise (Empresa 
Nacional de Ferrocarriles — Enafer), 
160 

national security, 302-11; external threats 
to, 302-3; internal threats to, 303-11 

National Security Doctrine, 230 

National System for Supporting Social 
Mobilization (Sistema Nacional de 
Apoyo a la Mobilization Social — 
Sinamos), 230 

National Telecommunications Enterprise 
of Peru (Empresa Nacional de Teleco- 
municaciones del Peru — Entelperu), 
164-65 

National Tourism Board (Camara Na- 
cional de Turismo — Canatur), 165 

National War College (Escuela Superior 
de Guerra— ESG), 275, 279, 281 

native Americans (indios), 100-102; access 
of, to medical care, 96; attempts by, to 
change ethnicity, 96; attitudes toward, 



409 



Peru: A Country Study 



96, 128; biological adaptation by, 81; 
in campaign of 1990, xxxi; contact of, 
with outsiders, 96; discrimination 
against, 80, 100; extermination of, by 
disease, 79, 80, 96; geographic distri- 
bution of, 81, 101; impact of drug 
trafficking on, 96; impact of gold rush 
on, 96; impact of oil exploration on, 96; 
integration of, xxix; languages of, 96, 
101 ; litigation by, 27; oppression of, 96; 
as percentage of population, 24, 95; 
population of, xxxi, 96, 99; poverty of, 
96, 181; rebellions by, 25, 27, 39, 266; 
as serfs, 81; in Selva, 96; standard of 
living of, 109; taxes on, 27 

native communities (ay litis), 19 

natural disaster, 72-74, 125, 242 

natural resources: foreign exploitation of, 
3-4; limits on, 140, 143 

Naval Academy of Peru (Escuela Naval 
del Peru), 281; entrance requirements 
for, 281-82 

Naval Air Service, 285 

Naval Studies Center (Centro de Estudios 
Navales— CEN), 281 

Naval Technical and Training Center 
(Centro de Instruccion Tecnica y En- 
trenamiento Naval— CITEN), 281 

Naval War College (Escuela de Guerra 
Naval— EGN), 281 

navy. See Peruvian Navy 

Nazca: wine production in, 23 

Nazca people, 6 

negros, 80 

neomercantilism, 30; under Castilla, 32 
Netherlands: development assistance 

from, 308; materiel from, 286 
New Granada, 266 
New Laws of 1542, 16, 20 
New Majority Movement (Movimiento 

Nueva Mayoria), xlix 
New Majority Movement-Change '90 

coalition, xlix, Hi 
Ninan Cuyoche, 17 

19th of April Movement (Movimiento 19 

de Abril), 255 
nitrates: Chile's possession of, 268; export 

of, 31; extraction of, 3 
Nonaligned Movement, 51, 154 
nonalignment, 253 

Nueva cronicay buen gobierno (New Chroni- 
cle and Good Government) (Guaman 
Poma), 13 



Nuevas Leyes. See New Laws of 1542 
Nunez de Balboa, Vasco, 13 
Nunez de la Vela, Don Blasco, 16 



OAS. See Organization of American 
States 

Obando, Enrique, xlvi-xlvii, xlix 

O'Donnell, Guillermo, 51 

Odria, Manuel A., 229 

Odrfa administration (1948-50; 1950- 
56); education under, 131; land distri- 
bution under, 124; as president, 45-47; 
social programs of, 46 

Office of the Public Ministry, 315 

officer corps, 49-50; social origins of, 49 

Oiga magazine, 240 

oil (see also petroleum): effect of economy 
on, 152; effect of political violence on, 
152; embargo, 51; exploration, 4, 96, 
152; export of, 166; foreign investment 
in, 144; marketing of, 152; number of 
workers in, 39; prices, 194; production, 
144, 152; refining, 152 

oligarchy, 37; alignment of military with, 
38 

oncenio (eleven-year rule). See Legufa y 
Salcedo administration, second 

oppression: of native Americans, 96 

Opus Dei movement, 233 

Orbegoso, Luis de, 30 

Organization of American States (OAS), 
xli, xlii, xlix 

Our Lady of Ranson (Virgen de las Mer- 
cedes), 120 

output: national, 140; per capita, 139 



Pacasmayo: port of, 163 
Pachacuti Inca Yupanqui, xxx 
Pacific Naval Force, 284 
padrinazgo . See godparenthood 
Paita: port of, 163 
Palmer, David Scott, xxxviii, xlvi 
Pan American Highway, 163 
Pan American Satellite (PAS-1), 164 
"Panorama," 240-41 
Paracas people, 6 
Pardo, Manuel, 33, 34, 267, 268 
Pardo Mesones, Francisco, 234 
Pardo y Barreda, Jose de, 38; as presi- 
dent, 39 

Partido Civilista. See Civilista Party 



410 



Index 



Partido Comunista Peruano. See Peruvian 
Communist Party 

Partido Democrata Cristiano. See Chris- 
tian Democratic Party 

Partido Liberation Nacional. See National 
Liberation Party 

Partido Popular Cristiano. See Popular 
Christian Party 

Partido Socialista Peruano. See Peruvian 
Socialist Party 

Partido Unificado Mariateguista. See 
Mariateguist Unified Party 

Pastor, Robert, xli 

PC. See Civilista Party 

PCP. See Peruvian Communist Party 

PCP-SL. See Communist Party of Peru- 
Shining Path 

PDC. See Christian Democratic Party 

Peasant Communities (Comunidades 
Campesinas), 76, 78, 122-23; members 
of, 123; number of, 78 

Peasant Groups (Grupos Campesinos), 76 

Peasant Patrols (rondas campesinas), 
xxxvi,-xxxvii, 122, 126, 309; members 
of, xxxvii; number of, xxxvii 

peasant rebellions, 41, 47; of 1963, 125; 
number of, 124 

peasants, 100; income of, from coca, 
170-71; insurgency of, 304; migration 
by, 194; resistance of, to Shining Path, 
xxxvi, 122, 309; support of, for Shin- 
ing Path, xxxvi 

penal code, 313-15; of 1924, 313; pro- 
posed, 313 

penal system, 315-18 

peonage (see also serfdom), 102-4; peons 
on, 102-3 

peons, 102-4; number of, 102; punish- 
ments of, 103; restrictions on, 103; self- 
protection, 103 
Perez Godoy, Ricardo, 48, 230 
Peru-Bolivia Confederation (1836-39), 31 
Peruvian Air Force (Fuerza Aerea del 
Peru — FAP) (see also armed forces; mili- 
tary), 262, 287-88; aircraft of, 287; 
bases, 287; combat units of, 283; 
deployment of, 283, 288; general staff 
of, 284; groups, 287; growth of, 262; 
materiel, 284, 287; military regions of, 
283-84; missions of, 288; moderniza- 
tion, 287; number of personnel, 262, 
287; relations of, with Soviet Union, 
263; training, 287; uniforms, ranks, 



and insignia, 188-89; women in, 281 
Peruvian Army (Ejercito Peruano — EP) 
(see also armed forces; military), 282-84; 
in border conflicts, 44; civic action 
projects, 163; conscription for, 282; 
deaths in, by insurgency, xlv; desertion 
rates, xlviii; drug interdiction by, xxxix; 
extremists in, xlvii; founded, 267; 
growth of, 262, 282; morale in, xlvii- 
xlviii; number of personnel in, 282; re- 
lations of, with Soviet Union, 263; sala- 
ries of, xlvii-xlviii; uniforms, ranks, and 
insignia, 288-89; war of, against insur- 
gents, 126; women in, 282 
Peruvian Association of Small- and Medium- 
Sized Businesses (Asociacion Peruana 
de Empresas Medias y Pequefias — 
Apemipe), 228, 234 
Peruvian Communist Party (Partido 
Comunista Peruano— PCP), 40, 227, 
305, 307 

Peruvian Current. See Humboldt Current 

Peruvian Institute of Social Security (In- 
stitute Peruano de Seguridad Social — 
IPSS), 134 

Peruvian Legion, 266 

Peruvian Military Instruction Center 
(Centro de Instruction Militar Perua- 
na— CIMP), 281 

Peruvian Navy (Marina de Guerra del 
Peru — MGP) (see also armed forces; 
military), 262, 284-86; chain of com- 
mand in, 284; fleet of, 285-86; growth 
of, 262, 284; marines, 284; mutiny of 
1948 in, 45, 303; number of personnel 
in, 262, 284; Pacific fleet, 285; uni- 
forms, ranks, and insignia, 288-89; 
women in, 279, 284 

Peruvianness (peruanidad): changes in, 
62-63 

Peruvian Police Forces (Fuerzas Poli- 
ciales — FF.PP.) (see also National 
Police), 294-302; corruption in, xli, 
245, 294, 299; deaths in, by insurgents, 
xlv, 264, 297, 308; distrust of, xli; drug 
interdiction by, xxxix; duties of, 263; 
human rights violations by, 294, 299, 
309; number of members of, 294; or- 
ganized, 294; pay, 300; president as 
head of, 294; prisons controlled by, xlii; 
prison massacre by, 294; recruits, 295; 
reorganized, 294, 299; role of, in drug 
interdiction, 298; tensions of, with 



411 



Peru: A Country Study 



armed forces, 300; United States sup- 
port for, 264; women in, 295 

Peruvian Socialist Party (Partido Socia- 
lista Peruano— PSP), 40 

Peruvian State Mineral Marketing Com- 
pany (Mineroperu Comercial — Min- 
peco), 152 

Peruvian State Mining Enterprise (Em- 
presa Minera del Peru — Mineroperu), 
152 

Peruvian Telephone Company (Compa- 
fria Peruana de Telefonos — CPT), 164 

Petroleos del Peru. See Petroleum Enter- 
prise of Peru 

petroleum (see also oil), 151-54; export of, 
166; export earnings from, 142, 155; 
foreign investment in, 145, 151, 155; 
under Fujimori administration, 155; as 
percentage of gross domestic product, 
151; in Selva, 71 

Petroleum Enterprise of Peru (Petroleos 
del Peru— Petroperu), 152, 219 

Petroperu. See Petroleum Enterprise of 
Peru 

PG. See General Police 
physicians: in Lima, 88; and patient ratio, 
133 

Pierola, Jose Nicolas de, 37, 269, 275 

Pike, Fredrick B., 18 

Pinochet Ugarte, Augusto, Hi, 254-55 

PIP. See Investigative Police of Peru 

Piura, 82; migration to, 87 

Pizarro, Francisco: assassinated, 16; Ata- 
hualpa executed by, 14; background of, 
12; dispute of, with Almagro, 15-16, 
266; Lima founded by, 18; invasion of 
Peru by, 13-14 

Pizarro, Gonzalo, 16 

Plaza de Armas, 117 

PLN. See National Liberation Party 

PN. See National Police 

Polay Campos, Victor, 310 

Policfa de Investigaciones del Peru. See In- 
vestigative Police of Peru 

Policia General. See General Police 

Policia Nacional. See National Police 

Policia de Seguridad. See Security Police 

Policia Tecnica. See Technical Police 

political: assassinations, 44; instability, 30; 
rebellions, 25-27; vacuum of 1980, 5 

political divisions: administrative system 
of, 94; created by migrants, 93-94; 
hierarchy of, 93; under Inca Empire, 



91-92; reorganization of, 92-93, 95; as 
source of identity, 93; under Spanish 
rule, 92 

Political-Military Commands, 279 
political organizations, 122, 228-30; 
popular distrust of, xli; relations of, 
with political parties, 229; student, 239 
political parties (see also under individual par- 
ties), 5, 222-28; dissatisfaction with, xl, 
207, 225, 229-30, 247; distrust of, xli; 
organization of first, 33; relations of, 
with political organizations, 229; role 
of, in democracy, 248 
political risk, country assessments of, xxxv 
political violence, 44, 139, 140; deaths 
from, xxxv, 245; effect of, on mining 
sector, 152; property damage from, 
xxxv; in rural areas, 140 
politics: role of American Popular Revo- 
lutionary Alliance in, 41; role of armed 
forces in, 41 ; role of intelligence services 
in, 279 

Pontifical Catholic University of Peru 

(Pontficia Universidad Catolica del 

Peru), 131 
Pontificia Universidad Catolica del Peru. 

See Pontifical Catholic University of 

Peru 

Popular Action (Accion Popular — AP), 
225-26; in campaign of 1990, xxxi; 
founded, 225, 270; ideological shift in, 
226; regional representation in, 94; po- 
litical base for, 225-26; social base for, 
47 

Popular Aid (Socorro Popular), xlv, 306 

Popular Christian Party (Partido Popu- 
lar Cristiano — PPC), 226; in campaign 
of 1990, xxxi 

Popular Cooperation (Cooperation Popu- 
lar) projects, 87 

population (see also birth control; depopu- 
lation; family planning: of Chimbote, 
83; decline of native, 17, 22; density, 
67, 68; distribution of, 82, 84, 92; eth- 
nic distribution in, 24, 95; immigrants 
as percentage of, 105; under Inca em- 
pire, 17; of Lima, 47, 141; of native 
Americans, 96, 99; in 1981, 79; percent- 
age of, chewing coca, 55; percentage of, 
in Lima, xxix, 4; percentage of, in 
shantytowns, 90; percentage of, in mili- 
tary class, 107; percentage of, in rural 
areas, 84; percentage of, in Selva, 70; 



412 



Index 



percentage of, in Sierra, 68; percent- 
age of, practicing Protestantism, 121; 
policy, 85-86; of Potosi', 18; pre- 
Columbian, 79; projected, 85; ratio of 
arable land to, 142; in 1796, 79; under 
Spanish rule, 17, 24; working class as 
percentage of, 39 

Population Crisis Committee of the United 
States, xxxiv 

population growth, lv, 4, 46; factors in, 
80; government response to, 84; of mes- 
tizos, 80; problems caused by, 142, 
143, 144; rate, 84-85; and service sec- 
tor, 155 

population statistics: birthrate, 85; child 
mortality rate, 133; death rate, 85; fer- 
tility rate, 4, 85; infant mortality rate, 
54, 134; life expectancy, 54, 85 

ports: deep-water, 163; river, 163 

postal service, 194 

potatoes, 9 

Potosi: population of, 18; silver mines at, 
17 

poverty, 139, 140, 174, 179-81, 203, 207; 
attempts to reduce, 192; extreme, 180; 
under Fujimori administration, xxxiv, 
252; under Garcia administration, 180- 
81, 192; increase in, lv, 179-80, 183; 
in Latin America, 180; measures of, 
179, 180; of native Americans, 96; need 
for programs to reduce, 199, 200, 
201-2; under open economy, 183; per- 
cent of families in, 180; rural, 180, 182, 
192; urban, 46, 180, 182; of workers 
in informal sector, 176 

power: dispersion of, 4 

Prado, Leoncio, 131 

Prado, Mariano Ignacio, 34 

Prado administration (1865-67, 1876- 
79), 268 

Prado y Ugarteche, Manuel, 236; Ameri- 
can Popular Revolutionary Alliance 
support for, 47; as president, 44-45 

Prado y Ugarteche administration, first 
(1939-45), 125 

Prado y Ugarteche administration, second 
(1956-62), 125 

pre-Incan cultures, 5-8; agriculture in, 6; 
armed forces in, 265; lifestyles in, 6; 
origins of, 5 

president (see also executive branch): ap- 
pointments by, 213; as commander in 
chief, 213, 274, 278, 294; under con- 



stitution of 1860, 211; under constitu- 
tion of 1920, 211; under constitution of 
1979, 212-14; decrees of, lv, 213, 216; 
discretionary power of, 216-17; distrust 
of, xli; elections for, 222; military, 269; 
powers of, lv, 213; requirements of, 
212; term of, 212-13 
Presidente Gonzalo. See Guzman Reynoso, 
Abimael 

prices: under Fujimori, 196-97; under 

Garcia, 192-94; increase in, 193-94; 

restrictions on, 192-93, 194-95 
prisons: conditions in, 317; control of, 

xlii; guarded by Security Police, 300; 

massacre in, 231-32, 264, 294, 316; 

number of, 316; physical state of, 316; 

population of, 316, 317; riots in, 264, 

316 

Private Pension Funds Administrators 

(Administradoras de Fondos de Pen- 

siones— AFPs), 134-35 
privatization: under Belaunde, 52, 188; 

under Fujimori, 1, liv, 134, 164-65, 248 
professional class: political affiliation of, 

47 

Pro-Human Rights Association (Asocia- 
cion Pro-Derechos Humanos — Aprodeh): 
terrorist attack on, 218 

protectionism, 168, 169, 185-86; de- 
creased, 198-99, 200; effect of, on 
manufacturing, 151; in the Great 
Depression, 141; in the 1960s, 141; 
under Velasco, 186 

Protestant Church (see also under individ- 
ual denominations): converts to, 120-21; 
evangelical, 233; percentage of follow- 
ers in population, 121; support by, of 
Fujimori, xxxii 

Protocol of Peace, Friendship, and 
Cooperation (1934), 43 

Protocol of Rio de Janeiro (Rio Protocol) 
(1942), 55, 263, 302; guarantors of, 302 

provinces (see also districts): elite class in, 
109 

Provisional Administrative Council (Con- 
sejo Administrativo Provisional), xliii 
PS. See Security Police 
PSP. See Peruvian Socialist Party 
PT. See Technical Police 
public administration: increase in, 219 
Public Ministry, 217 
pueblos jdvenes. See shanty towns 
PUM. See Mariateguist Unified Party 



413 



Peru: A Country Study 



Puno: decline in prestige of, 25, 83; role 
of Catholic Church in, 234 



Quechua language, xxix, 96, 101; in Inca 

empire, 10, 266; in Lima, 89; as second 

language, 129 
Quechua people {see also Incas), 8, 62, 

128; and Catholic Church. 1 18; in elite 

class, 105 
Quehacer, xxxvii, 240 
quinoa: production of, 9 
quipu (knot-tying) record-keeping system, 

10 

Quito: textile manufacturing in, 23 



radio, 164; in Lima, 88 

railroads, 160; British involvement in, 35, 
268; construction of, 33, 69; foreign in- 
vestment in, 144, 268; length of, 160; 
passenger service on, 163; plans to elec- 
trify, 160 

Raimondi, Antonio, xxx 

Ramirez Durand, Oscar Alberto ("Feli- 
ciano"), xlv 

Reagan administration, 253 

recession: under Garcia, 57 

reductions (redueciones), 19, 81 

reduction system, 82 

regional clubs, 89, 90-91, 93; number of, 
91 

regional government: established, 221; 
members of, 221; powers of, 221 

regionalization, xliii 

religious: brotherhoods, 119; cults, 121; 
revival (1560s), 15 

religious festivals, 120; costs of, 118; im- 
portance of, 120; participation in, 118; 
sponsors of, 118-19 

religious leaders, 121-22; duties of, 122; 
selection of, 121-22; staffs of office, 122 

reorganization decree (1987), 89, 95 

repartimiento, 81 

Republican Guard (Guardia Republi- 

cana— GR), 294 
Reserva. See Army Reserve 
reservoirs, 76 
residencia, 20 

Revolutionary Government of the Armed 

Forces. See Velasco administration 
Revolution of 1895, 37 



Rio Amazonas. See Amazon River 
Rio de la Plata, 266 
Rio Moche, 7 
Rio Moche Valley, 6 
Rio Protocol. See Protocol of Rio de 
Janeiro 

rites of passage, 113; fiestas for, 113; god- 
parents for, 113; seasonal farm work as, 
104 

roads: construction of, 33, 69-70, 163; 

maintenance of, 163; pre-Incan, 8 
Rodrigo Franco Command, 218, 238, 

245 

Rodriguez, Antonio, 303 
Rodriguez Ballon Airport, 164 
Roman Catholic Church {see also Inqui- 
sition), 21-25; under constitution of 
1979, 212; economic power of, 22; 
financial assets of, 22; grassroots or- 
ganizations of, 233; as landowner, 118; 
and native Americans, 118; policies of, 
118; political role of, 232-34; relation- 
ship of, with government, 212; role of, 
117-18; support by, of Vargas Llosa, 
xxxii 

Roman Catholic clergy, 21 

Roman Catholicism, 117-21; conversion 
to, 21. 119-20; cults in, 121; festivals 
of, 118, 120; as official state religion, 
118; role of, 118; syncretic, 22, 119 

Romeros family, 236 

rondas campesinas . See Peasant Patrols 

Rose of Lima (saint). See Santa Rosa de 
Lima 

royal offices, sale of, 24 
rubber: export earnings from, 142; export 
of, 142 

runakuna. See native Americans 
rural areas: families in, 110, 114-16; im- 
pact of insurgency on, 126; income in, 
193; insurgency in, 270; lower class in, 
108; middle class in, 108; Peasant 
Communities in, 123; political inclina- 
tions in, 228; population in, 82, 84; 
poverty in, 180, 181, 182, 192; state of 
emergency in, xxxv; violence in, 140, 
194 



Sachs, Jeffrey D., li, 245 

SAIS. See Social Interest Agrarian As 

sociation 
Salaverry: port of, 163 



414 



Index 



Salomon-Lozano Treaty (1922), 40, 302 

San Martin de Porres (Saint Martin of 
Porres), 120 

San Marcos University, 39, 240 

San Roman, Maximo, 236 

Santa Barbara Prison, 316; massacre in, 
264, 316; riots in, 264, 316 

Santa Monica Prison, 316 

Santa Rosa de Lima (Saint Rose of 
Lima), 117, 120 

Salaverry, Felipe, 30 

Sanchez Cerro, Luis M., 269; assassi- 
nated, 43, 44, 270; as president, 41 

Sanchez, Luis Alberto, 244 

Sandinistas, 254 

Santa Cruz y Calahumana, Andres de, 
30-31 

Savings Bank of Lima (Caja de Ahorros 

de Lima), 160 
scandals, 251 

School for Magistrates (Academia de la 
Magistratura), xliii 

School of Diplomacy, liii 

schools: Catholic, 130; military, 281; 
number of, 130; postsecondary, 130; 
primary, xxxiv, 129; private, 129; pub- 
lic, xxxiv, 129, 130, 131; secondary, 
129 

SDN. See National Defense System 

Secretaria de Defensa Nacional. See Na- 
tional Defense Secretariat 

Security Police (Policia de Seguridad — 
PS), 294, 300-301; border control by, 
300; number of members of, 300; pris- 
on guarding by, 300; training, 300-301 

Selva (jungle) region, xxix, 63, 70-72; 
agriculture in, 78; fishing in, 78; gold 
rush in, 71; native Americans in, 96; 
natural gas in, 71; percentage of popu- 
lation in, 70, 84; petroleum in, 71; 
resources of, 71; settlements in, 71; 
standard of living in, 109 

Sendero Luminoso. See Shining Path 

Serior de los Milagros (Lord of the Mira- 
cles), 74; festival, 119 

Serior de los Temblores (Lord of the 
Tremors), 74 

serfdom: end of, 125 

serfs, 81 

serranos: characteristics of, 61; urban mi- 
gration by, 62 

service sector, 155-57; government, 155, 
244; labor force in, 175; as percentage 



of gross domestic product, 146, 155; 
private, 155; uncertainty about statis- 
tics for, 146-47; unregistered activities 
in, 155-56 

Servicio de Inteligencia Nacional. See Na- 
tional Intelligence Service 

Servicios Industriales de la Marina. See 
Maritime Industrial Services 

Seventh-Day Adventist Church, 233 

sewerage: inadequate, 133 

shantytowns, xxix, 47, 84; construction 
of, 90; number of, 90; percentage of 
population living in, 90, 111; political 
inclinations in, 228; regional clubs in, 
89; religious cults in, 121; Shining Path 
in, xxxviii; structure of, 111-12; wom- 
en's roles in, 112 

Sheahan, John, 1, li 

sheep, 64, 68, 77 

Shining Path (Sendero Luminoso — SL), 
liv, lv, 5, 125-27, 207, 255, 305-9; 
armed strikes of, 237; army response 
to, 126, 293; assassinations by, xxxviii, 
220, 238, 255, 292-93, 306, 308; at- 
tacks in Lima, 251; attempts to sup- 
press, 54; capture of members of, xliii, 
lv, 264, 274, 309, 315; casualties in, 
xlv; catalysts for, 126, 127; coca income 
of, 170, 306; competition of, with 
MRTA, 310; conflict of, with Catho- 
lic Church, 233-34; defense of coca 
growers by, 55; elections sabotaged by, 
222; founded, 54; funding, xlv; ig- 
nored, 242; impact of, 126; indoctrina- 
tion by, 306-7, 316; international 
networks of, xliv; leadership of, 126; 
members of, xxxvi, 306; migration to 
escape, xxix, 87, 116; organization of, 
306; origins of, 132, 239, 305; peasant 
resistance to, xxxvi, 122, 126, 309; plat- 
form of, 125, 199; police responses to, 
301; prison activities of, 316; prison 
raids by, 315-16; prison riots by, 264, 
316; property damage by, xxxv, 264, 
305; as protectors of peasants, 299; 
reaction of, to autogolpe, xliii; reactions 
to, xxxvii, xxxviii, 126, 127, 227; 
recruits to, 54, 126, 133, 306-7; in shanty- 
towns, xxxviii; success, 307; success of, 
explained, 305-6; support for, xxxvi; 
taxes on Colombian drug traffickers, 56, 
299; teachers in, 133; threats by, 220; 
victims of, xxxv, xlv, 5, 264, 293, 305, 



415 



Peru: A Country Study 



308; violence by, xlv, 62, 140, 261, 
264, 292, 299, 306, 308; women in, xliv 

shipbuilding, 286 

Shipibo people, 71, 99 

shipping, 163 

Si, 240 

Sierra (highlands) region, xxix, 63, 
68-70; agriculture in, 68; biological 
adaptation to, 70, 74, 81; climate in, 
68; diet in, 54; environment of, 76; ha- 
ciendas in, 103; infant mortality in, 54; 
life expectancy in, 54; livestock in, 68; 
migration from, xxix, 113, 116; min- 
eral resources in, 68; percentage of 
population in, 68, 84; political inclina- 
tions in, 228; population density in, 68; 
standard of living in, 46, 54, 107-9; re- 
ligious festivals in, 120; religious leader- 
ship in, 121; traditions of, 61; village 
leadership in, 121-22 
Sihuas Province: migration from, 83 
SIL. See Summer Institute of Linguistics 
silver: discovery of, 17; export earnings 
from, 142; export of, 142; world mar- 
ket prices for, 142-43 
silver mining, 3, 68; collapse of, 31; de- 
velopment of, 25 
silver production: decline in, 22, 24; 

revival of, 24, 35 
Sima. See Maritime Industrial Services 
SIN. See National Intelligence Service 
Sinamos. See National System for Sup- 
porting Social Mobilization 
Sinchi Battalion, 242, 298, 315 
Sindicato Unico de Trabajadores de la 
Ensefianza del Peru. See Trade Union 
of Education Workers of Peru 
Sistema de Defensa Nacional. See Na- 
tional Defense System 
Sistema Nacional de Apoyo a la Mobiliza- 
tion Social See National System for 
Supporting Social Mobilization 
SL. See Shining Path 
slavery: abolished, 32, 99 
SNA. See National Agrarian Association 
SNI. See National Industries Association 
SNMP. See National Mining and petrol- 
eum Company 
social emergency program: need for, 250; 

promise of, 250 
Social Interest Agrarian Association (So- 
ciedad Agricola de Interes Social — 
SAIS), 122 



Socialist International, 254 

Social Property Enterprises (Empresas de 
Propiedad Social— EPS), 122 

social security system, 134 

social welfare programs: under Odna, 46 

Sociedad Agricola de Interes Social. See 
Social Interest Agrarian Association 

Sociedad Nacional Agraria. See National 
Agrarian Association 

Sociedad Nacional de Industrias. See Na- 
tional Industries Association 

Sociedad Nacional de Mineria y Petroleo. 
See National Mining and petroleum 
Company 

society, confidence in, 202 

Socorro Popular. See Popular Aid 

sol, xl 

Somoza Debayle, Anastasio, Hi 
Southern Cone Common Market (Mer- 

cado Comun del Sur — Mercosur), 256 
Southern Peru Cooper Corporation, li, 

160 

Southern Railroad, 160 

Soviet Union: aid from, 51; materiel ac- 
quired from, 263, 276, 278, 284, 287; 
military advisers from, 277; military 
mission, 263, 276; military relations 
with, 256, 263, 278; relations with, 256 

Spain: decline in power of, 22; Na- 
poleon's invasion of, 28, 266; police as- 
sistance from, 299; reaction of, to 
autogolpe, 255; revenue remittances to, 
24; war with, 33, 267 

Spanish language, 96; necessity of, for so- 
cial mobility, 128 

Spanish rule, 14-27; administration 
under, 20-21; armed forces under, 266; 
artisan industry under, 23; caste sys- 
tem under, 80-81, 101; civil wars 
under, 28; economy under, 17-20; in- 
fluences of, 18; internal divisions in, 14; 
patrimony under, 25-27; population 
under, 17, 80; reorganization under, 
92; resistance to, 14, 15 

Special Technical Qualifying commission, 
317 

squatter settlements. See shanty towns 
Standard Oil of New Jersey, 144 
state enterprises (see also nationalization), 
186-88, 187-88; banking, 51; deficits 
of, 188; increase in, 219; industry, 51; 
labor union of, 237; mining, 51; under 
Morales Bermudez, 190; as percentage 



416 



Index 



of gross domestic product, 188; share 
of, 188 

state of emergency, 238, 262; under con- 
stitution of 1979, 212, 274; extent of, 
xxxv, jd, 272-73, 274, 308, 312; effect 
of, on armed forces, 231; effect of, on 
government, 216, 231 
stock market crash of 1929, 40 
strikes, 238; armed, 237; effect of, on 
mining sector, 152; general, 38, 179, 
236, 237; by judges, 315; in the Sierra, 
47; on sugar plantations, 39; by textile 
workers, 177 
structural adjustment program (SAP), 
student associations, 239; demonstrations, 

132; movements, 40, 239 
students, 239-40; employment opportu- 
nities for, 240; in Lima, 88, 132; tra- 
dition of political organization by, 131, 
239 

subsidies, 188; ended, xxxiii, 197 
Sucre Alcala, Antonio Jose de, 29, 267 
sugar, 23, 74; export of, 142; export earn- 
ings from, 142; foreign investment in, 
144; number of workers in, 39; plan- 
tations, strikes on, 39 
Summer Institute of Linguistics (SIL), 
121 

Superior Courts, 217 
Support Group (Grupo de Apoyo), 1, 174 
Supreme Court of Justice, 217; appoint- 
ments to, 213, 217; governing spending 
on, 217; justices of, 217; replacements 
in, 312 

SUTEP. See Trade Union of Education 
Workers of Peru 



Tacna Detachment (Third Military 

Region), 283, 284 
Tacna Province, 35, 268 
Tagle y Portocarrero, Jose Bernardo de, 

28-29 

Taiwanese. See Chinese 

Taki Onqoy, 15; suppression of, 16 

TANS. See National Jungle Air Transport 

Tarapaca Province, 34, 268 

tariffs, 169, 190; cut, 198; under Fuji- 
mori, 198; simplified structure of, 198; 
under Velasco, 186 

Tawantinsuyu, 8, 91-92; policies of, 92 

tax: base, 219; rates, li 

taxes: collection of, 219; from mining, 



151; sources of, 88 
teachers: discontent among, 133; respect 
for, 129-30; salaries of, 133; in Shin- 
ing Path, 133; women as, 130 
Technical Police (Policia Tecnica — PT), 
294, 301-2; intelligence services of, 
301; as investigative unit, 301; num- 
ber of members of, 301; training of, 
301-2; women in, 301 
Technical Police Cadet School, 301 
Technical Police Detective School, 301 
Technical Police Instruction Center, 301 
telephones, 164, 194; in Lima, 88 
television, 164; access to, 241; in Lima, 

88; news programs, 240-41 
Tello, Julio C, 6 

terrorism {see also insurgency; Shining 
Path; MRTA), 165, 219, 274; armed 
forces actions against, 293; sentences 
for, xlii, 312, 313 
textiles: import of, 31 ; manufacture of, 23 
textile workers, strike by, 177 
Tiahuanaco people. See Tiwanaku people 
Tiwanaku (Tiahuanaco) people, 8 
Topa Inca Yupanqui, 8 
Torres Vallejo, Jorge, 244 
Torres y Torres Lara, Carlos, 214 
torture: of political prisoners, 44 
tourism, 165 
town council {cabildo), 20 
trade {see also exports; imports), 165-74; 
balance. See balance of trade; contra- 
band, 255; deficit, 169; desire to re- 
strict, 165; effect of exchange rate on, 
168; as factor in economic growth, 165; 
under Fujimori, 169, 198; liberalized, 
198, 248; open, 169; policy, 32; re- 
strictions, 190; structures of, 166; sur- 
plus, 166; tariffs on, 169; terms of, 
169-70; trans- Atlantic, 64 
Trade Union of Education Workers of 
Peru (Sindicato Unico de Trabajadores 
de la Ensenanza del Peru — SUTEP), 
133, 237 

Trans-Andean Highway (Central High- 
way), 163, 237 

transportation, 160-64; construction 
projects, 48; infrastructure, 163; mass 
transit, 163; railroads, 160-61 

Transportes Aereos Nacionales Selvati- 
cos. See National Jungle Air Transport 

Treaty of Ancon, 34, 268 

Treaty of 1866, 34 



417 



Peru: A Country Study 



Treaty of 1873, 34 

Tribunal of Constitutional Guarantees, 
xxxviii-xxxix 

tribute, 102; abolished, 32; to caudillos, 
32; to Inca empire, 9; to Spanish rul- 
ers, 20, 25 

Trujillo, 82; migration to, 87 

Trujillo uprising (1932), 41-43, 44, 230, 
269-70; armed forces in, 230 

tugurios, 111, 112 

tuna, 72 

Tupac Amaru (guerrillas), 16 

Tupac Amaru (Inca), 16 

Tupac Amaru II (See also Condorcanqui, 

Jose Gabriel), 27, 131 
Tupac Amaru, Diego Cristobal, 27 
Tupac Amaru rebellion (1780-82), 25 
Tupac Amaru Revolutionary Movement 
(Movimiento Revolucionario Tupac 
Amaru — MRTA), xxxv, liv, lv, 241, 
255, 309-10; competition of, with Shin- 
ing Path, 310; deaths of, xlv; founded, 
54; organization of, 309-10; police 
responses to, xxxix, 301; prison escape 
by, 316; property damage by, 264; 
reaction of, to autogolpe, xliii; reactions 
to, 227; teachers in, 133; threats by, 
218; victims of, xlv, 264, 293; violence 
by, 62, 261, 264, 299 



Ucayali Department: native Americans 
in, 99 

Ucayali River, 63 

Ulloa, Manuel, 240 

UNA. See National Agrarian University 

UNAM. See National Autonomous Uni- 
versity of San Marcos 

underemployment, 54, 140, 174, 176, 
207, 311 

unemployment, 54, 140, 176, 311; under 
Fujimori, xxxiv; increased, 197; in 
Lima, 176; rate of, 238 

unionization, 178 

Union Nacional Odriista. See National 
Odriist Union 

United Left (Izquierda Unida — IU), 56, 
227, 228; political power of, 221 

United Nations: food assistance from, 199 

United Nations Development Pro- 
gramme, xxxiv 

United Nations Human Rights Commis- 
sion, xxxviii 



United Nations Working Party on Dis- 
appeared Persons, xxxviii 

United States: aid from, 1, 232, 276, 293; 
cocaine consumption in, 55; depend- 
ency on, 51; efforts to curtail coca 
production, xxxix, 56, 254, 255; food 
assistance from, 112, 134, 199; free- 
trade agreements with, 256; Fujimori's 
visit to, 248; as guarantor of Rio Pro- 
tocol, 302; investment by, 35, 144; 
materiel acquired from, 270, 276, 278, 
284, 286; military assistance from, 270, 
276; military mission, 263, 275-76; 
military training by, 263, 275-76; mo- 
bile training teams, 298; reaction of, to 
autogolpe, 255; relations with, xlix, 1, 
251, 254, 256; Shining Path networks 
in, xliv; support for police forces, 264; 
withdrawal of support by, xxxix, 125 

United States Agency for International 
Development (AID), 134; food as- 
sistance from, 199, 298; International 
Police Academy, 295; Public Safety 
Mission, 295 

United States Drug Enforcement Ad- 
ministration, 297, 298 

United States Food For Peace (Public 
Law 480) programs, 112, 134 

Universidad de Huamanga. See Univer- 
sity of Huamanga 

Universidad del Centro. See University of 
the Center 

Universidad Nacional Agraria. See Na- 
tional Agrarian University 

Universidad Nacional Autonoma de San 
Marcos. See National Autonomous 
University of San Marcos 

Universidad Nacional de Ingenieria. See 
National Engineering University 

universities, 131-33; Catholic, 132; insta- 
bility in, 132; internal politics in, 132; 
quality of education in, 239; social im- 
portance of, 130 

University of Huamanga (Universidad de 
Huamanga), 132; as home of Shining 
Path, 132, 239, 305 

University of the Center (Universidad del 
Centro), 132 

UNO. See National Odriist Union 

Upper Huallaga Area Development 
Project, 295 

Upper Huallaga Valley: coca produc- 
tion in, 55, 171, 297, 298, 299; drug 



418 



Index 



trafficking in, 310; Shining Path activ- 
ity in, 306 

urban areas: economic bias toward, 47, 52; 
families in, 110; growth of, 67; impact 
of insurgency on, 126; importance of 
region of origin in, 108; lower class in, 
108; middle class in, 108; occupations 
in, 108; population in, 82; poverty in, 
46, 180, 182; and service sector, 155; 
subsidies for, 148, 184; violence, 140 

urbanization, 4 

urban migration. See migration, urban 
urban planning, 82 
Urubamba River, 70 

Valcarcel, Luis Eduardo, 12 

value added: to agriculture by coca, 170; 

government share of, 188 
Varese, Stefano, 96 

Vargas Llosa, Mario, 226, 244; campaign 
of, xxxi-xxxii; campaign promises of, 
246; economic shock program of, xxxii; 
opposition to, 234; popularity of, xxxii; 
support for, xxxii, 233, 234 

Vega Llona, Ricardo, 234 

Velasco Alvarado, Juan, 38, 49; back- 
ground of, 50 

Velasco administration (1968-75), 73, 89, 
211-12; cooperatives under, 183; cor- 
poratism under, 183; development 
under, 51; economy under, 51, 145; 
labor under, 178-79; land reform 
under, 125, 183; military relations 
under, 256; nationalizations under, 
145, 152, 183, 186; overthrown, 190; 
problems in, 272; protectionism under, 
186; reform under, 50, 140; restrictions 
on foreign investment under, 183, 
252-53; tariffs under, 186 

Velasco Astete Airport, 164 

Velasco Ibarra, Jose: Rio Protocol under, 
55 

Venezuela: reaction of, to autogolpe, 255 
viceroy, 20 

Viceroy alty of Peru, 25, 27 
Viceroyalty of Rio de la Plata, 25 
Vidal Layseca, Carlos, 250 
Vilcabamba, 16 

Villanueva Ocampo, Armando, 300 
violence, political, 5, 261; increase in, 

207; in reaction to economy, 199; in 

rural areas, 194 



Virgen de las Mercedes. See Our Lady of 
Ranson 

Virgen de la Puerta (Virgin of the Door), 
120 

Virgin of the Door. See Virgen de la 
Puerta 

Virgin of the Mercedes. See Our Lady of 

Ranson 
volcanoes, 73 

voting: by military personnel, 274; re- 
strictions on, 37 

Wachtel, Nathan, 9 

wages, 176-77, 182; attempts to fix, 
192-93, 238; average, xxxiv, 179, 182; 
declines in, xxxiv, 57, 174, 176-77, 
179, 196, 197, 238, 244; under 
Fujimori, xxxiv; under Garcia, 57, 192, 
244; in manufacturing, 182; minimum, 
176-77, 182; of union members, 182 

Wari (Huari) people, 8 

War of the Pacific (1879-83), 3, 34-35, 
263, 302; cause of, 34; effects of, 88, 
131, 268, 275; recovery from, 35, 268; 
settlement of, 34-35 

war with Ecuador (1859-60), 33 

war with Spain (1866), 33 

water: control of, by elite class, 74; lack 
of potable, 133; management of, 76; 
shortages of, 245 

Watson, Alexander, 254 

Werlich, David P., 28 

West Germany. See Germany, Federal 
Republic of 

Wiese family, 236 

women: in armed forces, 279-81, 287; as 
domestic servants, 113; education of, 
129; employment of, 112, 113; as fam- 
ily heads, 1 10, 112; family planning by, 
86; in informal sector, 112; occupations 
of, 110, 130; in police force, 295, 301; 
in prison, 315; in shantytowns, 112; in 
Shining Path, xliv; use of birth control 
by, 85-86 

wool: export earnings from, 142; export 
of, 31 

working class: effect of inflation on, 39; 

as percentage of population, 39 
workers: under constitution of 1979, 212; 

in informal sector, 176; number of, 

175; rights of, 185, 212; seasonal, 104; 

urban, 112 



419 



Peru: A Country Study 



worker unions, 123 

World Bank, 173, 174, 180, 182, 208; aid 
from, 1 

World War I: influence of, on economy, 
38 

World War II: impact of, 38, 45; mili- 
tary assistance during, 2700 
Wycliffe Bible Translators, 121 



Yawar Fiesta (Maria Arguedas), 120 



Yoshiyana Tanaka, Jaime, xlix 

Yunga language, 10 

Yupanqui, Pachacuti Inca, 8, 73 

zambos, 80 

Zambrano Padilla, Laura ("Comrade 

Meche"), xliv 
Zileri Gibson, Enrique, liv 
Zimbabwe, 254 

zinc: export of, 166; mining of, 68 



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